There are many regulations that you need to think about when renting your private property. You must be aware of what regulations apply and know what action you must take to ensure that you meet the minimum legal requirements. Failing to comply with the relevant standards can lead to hefty fines and other penalties. With this in mind, here is everything you need to know about the energy regulations in Scotland.
What are the regulations?
In the summer of 2017, the Scottish Government announced that new minimum standards would be introduced relating to the energy efficiency of rented properties. Under the new rules, all properties must receive an Energy Performance Certificate (EPC) rating of at least E before they can enter any new tenancy agreement. These changes will come into force from 1st April 2020. This will be followed by additional rules that will be coming into force over the next few years. From 1st April 2022, all rental properties will be required to have an EPC rating of at least D before entering a new tenancy. By 31st March 2025, all properties will be required to be in EPC band D or above. The standards may increase again after this period, but the details of this are not yet known.
Why do they exist?
The new regulations have been brought in to address concerns over the number of rental properties running in a less than economical way. In particular, the new rules form part of the government’s Energy Efficient Scotland programme, which aims to make all Scottish buildings warmer, greener, and more efficient. The First Minister who launched the campaign said: “The major investment in this programme highlights our clear commitment to ensuring that we tackle fuel poverty and reduce greenhouse gas emissions – helping those on low incomes as well as protecting our environment.” According to the Scottish House Condition Survey, 24.9% of households are living in fuel poverty and a further 7% are experiencing extreme fuel poverty. Extreme fuel poverty is defined as needing to spend more than 20% of income on domestic fuel. Properties with low-efficiency ratings require more energy and cost more to heat. Setting minimum energy efficiency requirements will help reduce fuel poverty by making homes more affordable to heat, especially during the winter months.
What is an EPC?
An EPC is a document that records the energy performance of a property. A qualified EPC assessor will inspect your property before providing it with an energy rating of A-G. The most energy-efficient properties will be placed in band A, while the least efficient properties will score a rating of G. As a part of an EPC, the landlord will also be provided with recommendations on how to improve the energy performance of the building. This may include things like installing additional insulation, replacing old windows, or upgrading to energy-efficient appliances.
Will the regulations apply to all properties?
The regulations will apply to most properties in the private rental sector. Some exceptions may apply, but the details of these are not currently known. It is thought that this information will be provided as a part of the draft regulations released later this year.
What action do I need to take?
If your property receives an EPC rating of F or G, then you must carry out energy-efficient improvements to increase your rating to at least E. However, as discussed above, the standards are due to increase over the coming years, with all properties expected to have a rating of C by 2040. For that reason, it’s in your interest to make your property as energy efficient as possible. This will significantly reduce your energy costs and should also avoid you having to make further improvements in a few years. Landlords may also have access to various government funding schemes, including grants and interest-free loans. These are in place to support landlords in bringing their properties up to the required energy standard. You can check whether you are eligible for these by referring to advice on the Energy Saving Trust.
What happens if I don’t comply?
Any landlords who fail to comply with the above regulations by the specific deadline will be issued with civil fines from their local authority. It is not yet known what the fines will be, but we are expecting this information to be released with the draft regulations later in 2019.