I was criticised by a member on our Landlord Law forum recently for saying (in effect) that I did not really know the answer to this – so I thought I would air it here and see if anyone has any firm views.
It’s about the new section 21 requirement, for tenancies in England which start or are renewed on or after 1 October 2015, to serve a valid EPC at the start of a tenancy. Does this or does this not include HMO rooms?
Let’s follow the legislation trail and see what we find.
We first need to look at the Deregulation Act, which is where it all starts.
s38 of the Deregulation Act 2015:
38 Compliance with prescribed legal requirements After section 21 of the Housing Act 1988 insert—
“21A Compliance with prescribed legal requirements (1)A notice under subsection (1) or (4) of section 21 may not be given in relation to an assured shorthold tenancy of a dwelling-house in England at a time when the landlord is in breach of a prescribed requirement.
(2)The requirements that may be prescribed are requirements imposed on landlords by any enactment and which relate to—
(a)the condition of dwelling-houses or their common parts,
(b)the health and safety of occupiers of dwelling-houses, or
(c)the energy performance of dwelling-houses.
So what that is doing is saying that section 21 is amended to introduce various new requirements. The detail of which are set out in regulations – in this case, the Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015
This says as follows:
Compliance with prescribed legal requirements 2. —
(1) Subject to paragraph (2), the requirements prescribed for the purposes of section 21A of the Act are the requirements contained in—
(a) regulation 6(5) of the Energy Performance of Buildings (England and Wales) Regulations 2012 (requirement to provide an energy performance certificate to a tenant or buyer free of charge);
So with specific reference to EPCs, the regulations are saying that the obligation to provide an EPC contained in reg 6(5) of the Energy Performance of Buildings etc regs is now required in order to serve a valid section 21 notice.
So finally, we need to take a look at those regulations.
What 6(5) (the section we are referred to) actually says is:
(5) The relevant person must ensure that a valid energy performance certificate has been given free of charge to the person who ultimately becomes the buyer or tenant.
As you can see, there is nothing there about making an exception for HMO properties.
This is why some people are saying that the EPC should be provided, even if it is an HMO. It may well be that for the purposes of the s21 requirements there IS no exception.
Normally EPCs are not required for rooms – as the requirement for an EPC is just for ‘buildings’. But does this apply in the context of the section 21 rules where the requirement just refers to one section of the regulations? Or do we assume that the limitation to ‘buildings’ comes with it?
My Landlord Law Forum critic asked me tersely
Surely it is possible to ask someone, either the Government office responsible for the Guide to Renting, or the DCLG, to provide clarification?
However this isn’t going to help – only a Judge can create a legal precedent on the interpretation of legislation and a Judge is only going to be bound by the wording of the statute, not by what an official at the DCLG says.
What’s your view? Or is there a piece of connecting legislation which I have missed, which clears this up?
I think there is no exception and the EPC is needed for S21 for HMO AST. Certainly to assume otherwise would be a daft risk to take – who wants to be on the receiving end of a Shelter-funded test case?
There are many HMOs where room by room metering exists and the tenant pays for (usually) electric heating so the EPC for the building is relevant to their assessment of affordability.
This is a copy of an excerpt from the How to Rent Booklet that we are all required to give to tenants. It clearly states that HMO’s do not need to provide a copy of the EPC
It’s under point number 5 ‘When you’ve found a place’
The landlord must provide you with:
A copy of this guide “How to rent: the checklist for renting in England” either via a link or as a printed copy.
A gas safety certificate. The landlord must provide one each year, if there is a gas installation.
Deposit paperwork. If you have provided a deposit, the landlord must protect it in a government approved scheme. Make sure you get the official information from the scheme, and that you understand how to get your money back at the end of the tenancy. Keep this information safe as you will need it later.
The Energy Performance Certificate. This will affect your energy bills and the landlord must provide one (except for Houses in Multiple Occupation).
Page 5 of the ‘How to Rent Booklet’ clearly states
‘The Energy Performance Certificate. This will affect your energy bills and the landlord must provide one (except for House in Multiple Occupation).’
Unfortunately the ‘How to Rent’ leaflet must be one of the most unhelpful and poorly drafted guidance leaflets out there. For example on page 8 in connection with the new retaliatory eviction regulations it has hashed together the phrasing
“If you have a serious complaint that has been checked by your local authority,
your landlord cannot evict you for six months, and must repair the fault”
What the heck does ‘checked by the LA mean’?. And, ‘must repair the fault’?
Anyone, either a landlord or tenant who attempts to rely on that will have a shock.
It is quite possible that those drafting the leaflet may have just one type of HMO in mind and that may be one where bills are all included and there are no extra bills for tenants to pay, but hey, if that is what DCLG say then it must be right!
The how to rent guide also misses off the fact that some LAs determine HMO properties under different rules. Some properties contain multiple rooms but do not require licensing whilst a similar property in a different LA will.
The litmus test for me is located in the act not the tenants guide, if you’re creating an AST then you should be looking at the law not the interpretation of the law by a poorly worded document. Besides, why WOULDN’T a tenant be given an EPC? Unless of course the property is ridiculously cold… Which of course is a whole other conversation!
I agree the how to rent leaflet is “an idiots guide” and not statute law. Therefore the statute should be the guidance and if in doubt my view would be err on the side of caution.
However that said with an HMO, if we assume that rooms have separate meters as one blogger suggested, would you serve an EPC for the whole building or just that room. You could have an old converted block which overall maybe rated D on the scale but it could have a more modern converted anex which if tested separately may be a B.
If local authority benefit payments hinge on the energy efficiency of the let then surely it should be the room in question tested as a stand alone dwelling. Are EPC assessors even able to do that??
This DCLG guidance says on pg. 6 that “An EPC is not required for an individual room when rented out”:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/307556/Improving_the_energy_efficiency_of_our_buildings_-_guide_for_the_marketing__sale_and_let_of_dwellings.pdf
My understanding is that if you let individual rooms you don’t need an EPC but if you rent the whole property on one tenancy agreement, you do.
As an energy assessor providing EPCs this is the guideline from my accreditation body:
House of Multiple Occupancy – HMOs – A House of Multiple Occupancy (HMO) is defined as a building with individual rooms which are rented out and share facilities such as kitchen and/or bathroom. Given that an EPC is only required for a self-contained unit, rented rooms within a HMO do not require an EPC (because the property includes shared facilities). However, if the whole building is sold it will require an
EPC, either commercial or domestic, depending on the building type.
So the EPC is for the whole house not individual rooms
If the house was split into self-contained flats then each flat will need it’s own EPC.
The simple fact is that these new requirements for s.21 proceedings do not serve any purpose apart from adding tripping points for landlords in order to weaken s.21.
It is also quite clear that these requirements were not carefully considered and one of the consequences is that the drafting is extremely poor (but that’s actually OK for the purpose of tripping landlords).
Therefore, if the Deregulation Act states that a valid EPC must be given, then a valid EPC must be given even if it does not make sense until a binding case law explicitly states otherwise. When you see a banana skin on the pavement, avoid it, do not step on it on purpose!
At face value, the EPC regulations are distinct from the s.21 requirements.
Agree with Romain (as usual!!).
Main point is if you issue paperwork you did not need to, you are safe. If you did not issue paperwork someone (a Judge?) thinks you should have, you are not safe.
The worst feature of the HTR leaflet is the reference to landlords always being responsible for repairing and replacing white goods, though I agree several other comments are unhelpful.
Individual rooms whether in an HMO or not do not need an EPC per se, but for s21 purposes they do. Play safe and issue the paperwork including on every tenancy – new, renewal, replacement, periodic etc etc. If you do you cannot be wrong, if you do not you may be.
‘fraid I have some bad news for you. Whilst I totally agree with the conclusion reached by other commentators, that you should serve an EPC to your HMO tenants even though the EPC regulations don’t require it, you won’t be able to get one from a DEA (domestic energy assessor). Instead you will need to instruct a non-domestic (commercial building) energy assessor. DEAs are told that HMOs do not count as domestic dwellings, and must be assessed using the non-domestic method. If you think that is daft, I totally agree with you. You couldn’t make it up, could you? Why don’t the government departments that create the legislation actually talk to each other about the practicality of obeying the new law before they enact it?