Tag Archives: Community

What is a “Public Body”? Is my charity/community group a public body?

The Energy Savings Opportunity Scheme Regulations 2014 define a public body as those bodies which must adhere to the UK public contract regulations.  This definition also ensures organisations should not be simultaneously subject to both mandatory Display Energy Certificates and Energy Savings Opportunities Scheme (ESOS) assessments.

The Public Contract Regulations 2015 state:

“contracting authorities” means the State, regional or local authorities, bodies governed by public law or associations formed by one or more such authorities or one or more such bodies governed by public law, and includes central government authorities, but does not include Her Majesty in her private capacity;

“bodies governed by public law” means bodies that have all of the following characteristics:—
(a)they are established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character;
(b)they have legal personality; and
(c)they have any of the following characteristics:—

(i)they are financed, for the most part, by the State, regional or local authorities, or by other bodies governed by public law;
(ii)they are subject to management supervision by those authorities or bodies; or
(iii)they have an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law;

Scotland has additional public contracts regulations applying to organisations in Scotland.  These may include additional organisations not included in England and Wales.

Public Body – Self Determination Questionnaire

If, as an organisation, you are unsure as to whether or not you are a “public body” you should seek you own legal advice.  When considering if your not-for-profit or charity is subject to these regulations the key will normally be in deciding if you are a body “governed by public law”.  The following steps may help your trustees/directors to decide:

  1. Are you listed in Schedule 1 of The Public Contracts Regulations 2015 (click to view) or Schedule 1 of The Freedom of Information Act 2000 (click to view), covered by The Public Contracts (Scotland) Regulations 2015 (click to view) as amended, a regional authority or a local authority (county, borough, district, town, parish councils etc.)?  If your organisation is one of these then you are a “public body” and will require DECs on the premises you occupy if the floor area and public visitation requirements are also met and you will not be subject to ESOS.  If you are not listed you should continue to step 2.
  2. Do you have a legal personality for the purposes of the regulations?  In effect, are you a legal body other than an individual?  Typical examples could include limited companies (including charitable companies), limited liability partnerships (LLP), community interest companies (CIC), charitable incorporated organisations (CIO), co-operative societies (Co-op), community benefit societies (BenCom) and financial mutuals.  If your organisation is any of these you may be a “public body” and should continue to step 3.  If not, you probably have no legal personality in this sense.
  3. Is your organisation established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character?  A traditional business exists to make wealth (money) for distribution to its owners, investors and shareholders.  In other words, it has industrial or commercial character and would not be considered a “public body” hence you may be subject to ESOS.  In contrast, public bodies in this sense exist to meet the general needs of society or of communities.  They often provide services like health, social care, education, child care and recreation etc on a not-for-profit basis.  They typically use any profits they make from business activities to reinvest in the provision of these services.  They may also have a legal “asset lock” preventing the distribution of any profits or assets to members or shareholders.  If this applies you should continue to step 4.
  4. Does the majority of your finance come from the State, regional or local authorities or other bodies governed by public law?  If the majority of your organisation’s funding comes from the government, regional authorities, local councils or other public bodies (likely to include grants from charities etc) then you are a “public body” and will be subject to Display Energy Certificates not ESOS.  If not, continue to step 5.
  5. Are you subject to management supervision from the State (including central government departments), regional or local authorities or other bodies governed by public law?  A simple way of determining this is to consider if you are free to run your organisation as you wish or whether you have to account for decisions that are made or actions taken to another organisation.  For example, most organisations receiving public money have to report upon the activities funded directly or indirectly back to the funding organisation, i.e. they are subject to supervision to ensure the money is spent as intended.  Registered Charities are subject to the supervision of the Charity Commission which is part of the State.  Similarly NHS practices are subject to supervision from the Department of Health through NHS Trusts and schools, colleges and academies are subject to supervision by the Department of Education through OfSTED.  If you are subject to management supervision then you are a “public body” and will be subject to Display Energy Certificates not ESOS.  If not, continue to step 6.  [NB: Educational establishments should remember that students are considered to be members of the public under these regulations.]
  6. Do you have an administrative, managerial or supervisory board with more than half its members appointed by the State (including central government departments), regional or local authorities or other bodies governed by public law?  If your organisation does then it is a “public body” and will be subject to Display Energy Certificates not ESOS.  If not, you are probably not a “public body” and so will be subject to the requirements of the Energy Savings Opportunities Scheme (ESOS) if you are a large undertaking on the qualifying date.

What types of tenancies are covered by MEES? Does it apply to properties occupied under Licence?

The tenancy types that the Minimum Energy Efficiency Standard (MEES) applies to are:

  • An assured tenancy (including an assured short hold tenancy) defined in the Housing Act 1988.
  • A regulated tenancy defined in the Rent Act 1977.
  • An agricultural tenancy as set out in the Energy Efficiency (Domestic Private Rented Property) Order 2015.

The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 only apply to tenancies in the private rented sector.  They do not apply to properties owned by councils and social landlords.  Similarly, they do not apply to properties occupied under licence without a qualifying tenancy.

What exemptions exist for MEES (Domestic Buildings)?

Whilst the exemptions are relatively straight forward, applying them is more complex and can also involve understanding the separate regulations that apply to both Energy Performance Certificates and the Minimum Energy Efficiency Standards.  There are some organisations suggesting that landlords can easily avoid improving their buildings by claiming an exemption.  Our experience is that this is more difficult than it first appears and could easily cost more than improving the building to meet the standards.

Exempt buildings and tenancies

Not all buildings and tenancies fall within The Energy Efficiency (Private Rental Property) (England and Wales) Regulations 2015.  The MEES do not apply to:

  • Buildings that have not been legally required to have an EPC.  These can include some listed buildings (see our specific notes on this topic), temporary properties, some HMOs and holidays lets.  It will also apply if the property has not been built, sold, let or significantly altered since the introduction of EPCs.
  • Buildings without a valid EPC.  This would include buildings where the EPC is over ten years old when it is relied upon for the MEES regulations.
  • Buildings only with a voluntary EPC.  An EPC may have been lodged for any number of reasons.  EPCs completed for purposes other than the construction, sale, let or significant alteration of the building, including those lodged in a mistaken understanding that one was required, are known as voluntary EPCs.  A building is only subject to MEES if the EPC was legally required.  NB: There is currently no way to tell this from the EPC itself and so you will need to know the history of whether or not the building has legally required an EPC.
  • Buildings occupied solely under licence.  MEES only applies to buildings occupied under a “Relevant Tenancy”.  This includes an assured tenancy, a regulated tenancy and domestic agricultural tenancies.  If the occupier is present only under a licence to occupy the MEES requirements will not apply as there is no tenancy.
  • Social housing schemes.  The regulations apply only to privately rented properties.  Social housing is exempt from MEES regardless of its condition, quality, or EPC rating.

Exemptions from making improvements

There are a number of circumstances where an exemption or multiple exemptions from making improvements can be claimed.  Where an exemption of this type is claimed, it may be possible to continue to rent out a substandard property.  However, all exemptions of this nature must be lodged on the PRS Exemptions Register.

Additionally, it should be noted that specific supporting evidence is required before registering an exemption on the PRS Exemptions Register.  We can provide specialist advice in this area as part of our service but would always caution clients that meeting these requirements can cost significantly more than making improvements to meet the MEES.  This will obviously depend upon the building and the improvements required but changing a few lights will likely be cheaper than obtaining professional services to prove a property will be devalued for example.

Registered exemptions are also non-transferable.  At best they are valid for a maximum of five years but a change in tenant or sale to a new landlord will normally mean the process (and costs involved) will have to be repeated.  Only then can new exemptions be registered.  There are also significant penalties for making a false or misleading declaration on the PRS Exemptions Register.

The main exemptions from making an improvement are:

  • All relevant improvements have been made – Where all the improvements suggested have been made and the property still remains below the MEES.
  • Incompatible wall insulation improvements – Where independent experts conclude that it is inappropriate to make the wall insulation improvements suggested as they would have a negative impact on the structure or fabric of the property (or the building of which it is part).
  • Improvements which cannot be financed without cost to the landlord – Landlords are not required to make improvements where relevant “no cost” funding is not available.  However, they must attempt to take advantage of funding that is available and must be able to demonstrate this.  Improvements that do not meet the new “Golden Rule” for Green Deal funding may fall within this exemption but only if alternative funding is not available.
  • Devaluation of the property – You are not required to make an improvement where an independent surveyor determines that making it would devalue the property by more then 5% of its current market value.
  • Third Party Consent is refused – Where there is a sitting tenant you might complete the formal process required in offering to improve the property and consent may be withheld.  Equally, you may require consent from a superior landlord, a bank or building society or the local authority which may be reasonably refused.  However, you will have to demonstrate that you have applied for permission and have tried to accommodate any reasonable restrictions that they have placed upon you before you can claim this exemption.  This exemption can also be used where planning, conservation or other consents are required from statutory authorities providing it can be demonstrated that these have been applied for and refused.

Please note that every suggested improvement must be considered individually for the purposes of claiming exemptions.  It is therefore highly likely that, even where some improvements may be subject to exemptions, others will not.  In this situation, some improvements to the building will still need to be made.

Minimum Energy Efficiency Standards (MEES Domestic)

the new Minimum Energy Efficiency Standards (MEES) for domestic buildings are now in effect throughout England & Wales.  Landlords are now unable to sign a new lease, renew a lease or extend a lease unless the building either achieves an EPC rating of at least E or a permitable exemption is registered.  From 1st April 2020 it will be unlawful to continue to let a domestic property which has legally required an EPC without an EPC rating of at least an E unless a permitable exemption is registered.

Here at Rowleys Commercial Energy Assessments Limited we can help you comply with these regulations. Taking action now will help to protect both the value of your asset and your future rental income.  We have a five step plan for all landlords to help minimise your costs:

  1. Baseline EPC - Have all your flats, apartments and houses surveyed by a reputable assessor with specialist additional insurance and have EPCs (at least in draft) produced that represent them all in their current state.  This will help to identify properties that might be at risk now or in the future giving you a baseline for your portfolio no matter what its size.
  2. Lodge Good EPCs - Decide the minimum standard you want to achieve for your portfolio.  You can then get the EPCs that achieve this rating lodged on the National Register.  Under the current rules, they will then be valid for the next ten years.
  3. Obtain Refurbishment Reports - For the remaining properties, obtain expert advice and modelling to find the most cost-effective ways of getting these up to standard.  There are often cheaper and less disruptive ways of improving the building and increasing its EPC rating than making the minimum improvements suggested on the EPC.  We provide this service in the form of a EPC Refurbishment Report which explains your current position and provides possible improvements you could make to meet the MEES.
  4. Improve Less Efficient Properties - You can now plan the improvement of less efficient properties in your portfolio.  You can potentially achieve this at the tenant’s expense through Green Deal Finance. Once the improvements have been made, get a new EPC completed and lodged.
  5. Protect Your Asset - Having got your property up to standard don't let your tenants downgrade your rating.  Seek legal advice and add tenancy terms that protect the EPC rating of your property.  Make tenants seek permission for changes and prohibit them from commissioning their own EPC for lodgement on the National Register without your permission as you don't want your good EPC overwritten with a poorer one. Compliance is an ongoing process and we can help advise you as to the sorts of changes that will affect the EPC rating.  We can also evaluate proposed changes to a property to see what the effect on the EPC will be.

When you come to us we will only charge you for the work we have to actually complete to help you achieve compliance.  Initially we can check your portfolio to see which properties need to be surveyed and which already appear to have appropriate EPCs.  We can also undertake sample checking to confirm the accuracy of the EPCs if you wish.  At each stage we only take forward the properties you instruct us to, you don't have to commit to the entire process for your whole portfolio in one go helping you spread the cost and target your most valuable or at risk properties.

If you are interested in finding out more about how we can help your portfolio meet the new Minimum Energy Efficiency Standards (MEES) please contact us to discuss your specific requirements.  We also provide services for non-domestic properties and so can also handle mixed property portfolios.

FAQ: Domestic MEES Assessments

Complying with the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 and MEES can seem more than a little daunting.  However, the Department for Business, Energy & Industrial Strategy have simplified the process into a single flow chart to help.  Combined with expert advice and support, this chart will help guide landlords through the process required to comply with the regulations.

MEES Process Flow Chart
Source: Page 81, Guidance for landlords and Local Authorities on the minimum level of energy efficiency required to let domestic property under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, BEIS (Oct 2017).

All exemptions claimed by landlords to improving domestic properties with an EPC rating at F or G must be registered on the PRS Exemptions Register.  This is an online process and does not cost anything to complete but you will need to have the correct supporting evidence available when you make your application.  In addition to registering exemptions, you can also search for details of exemptions that have already been registered.

To access the PRS Exemption Register visit https://prsregister.beis.gov.uk/

It is very important that you recognise that a single property may be subject to a number of different exemptions that apply to different improvements.  An exemption from one improvement does not exempt a landlord from making other relevant improvements.

Additionally, you will need to ensure that you have completed the correct processes and gathered sufficient evidence before registering an exemption.  There are significant penalties for registering a false exemption on the PRS Exemptions Register.

The Department for Business, Energy & Industrial Strategy (BEIS) have issued the guidance below regarding the minimum evidence required to support each type of exemption.

Exemptions Register Information Requirements
Information required for all exemptions:
  • The address of the relevant rental property;
  • which exemption to the Regulations the landlord is registering;
  • a copy of a valid Energy Performance Certificate for the property.
Additional Information and Evidence Related to Each Specific Exemption
Registering an exemption under the regulation 25(1)(b) exception – where a recommended measure is not a “relevant energy efficiency improvement” because the cost of purchasing and installing it cannot be wholly financed at no cost to the landlord (see Regulation 24(3)):
  • A description of why the landlord has been unable to obtain adequate ‘no cost’ funding.
  • Optionally, the landlord may also provide a copy of any evidence on which the landlord relies to demonstrate that they have been unable to access relevant ‘no cost’ funding to fully cover the cost of installing the recommended improvement or improvements.  This evidence of a landlords inability to access relevant ‘no cost’ funding may include a notification from a Green Deal provider advising that no Green Deal finance is available for a recommended measure, or that funding is only available to partially cover the costs.

Please Note:  The government is current consulting with a view to withdrawing this exemption and replacing it with a capped cost.

Registering an exemption under the regulation 25(1)(a) exception – where all relevant improvements have been made and the property remains below an E:
  • Details of any energy efficiency improvement recommended for the property in a relevant recommendation report (if separate to the relevant EPC), including a report prepared by a surveyor, or a Green Deal Advice Report;
  • Details, including date of installation, of all recommended energy efficiency improvements which have been made at the property in compliance with the Regulations.
Registering an exemption under the regulation 25(1)(b) exception – where the property is below an E and there are no relevant improvements which can be made:
  • A copy of the relevant report to demonstrate this (if separate to the relevant EPC).
Registering a wall insulation exemption under regulation 24(2):
  • A copy of the written opinion of a relevant expert stating that the property cannot be improved to an EPC E rating because a recommended wall insulation measure would have a negative impact on the property (or the building of which it is a part).
Registering a consent exemption under regulation 31(1):
  • A copy of any correspondence and/or relevant documentation demonstrating that consent for a relevant energy efficiency measure was required and sought, and that this consent was refused, or was granted subject to a condition that the landlord was not reasonably able to comply with.

Please Note:  Where the party who withheld consent was a tenant, the exemption will only remain valid until that tenant’s tenancy ends.  When that tenant leaves the property (or after five years, whichever is soonest) the landlord will need to try again to improve the EPC rating of the property, or register another exemption, if applicable.

Registering a devaluation exemption under regulation 32(1):
  • A copy of the report prepared by an independent RICS surveyor that provides evidence that the installation of relevant measures would devalue the property by more than 5%.
Registering an exemption upon recently becoming a landlord (regulation 33(1) or (3)):
  • The date on which they became the landlord for the property, and
  • the circumstances under which they became the landlord.

Please Note:  Where a person wishes to register an exemption upon recently becoming a landlord, the exemption will last for a period of six months.

There is no specific requirement in the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 for a landlord to seek tenant consent to carry out works.  However, depending on the terms of the tenancy agreement between a particular tenant and landlord, the landlord may need to obtain tenant consent before undertaking certain works (energy efficiency related or otherwise).  Where this requirement already exists, the PRS Regulations recognise that consent should be obtained before work is undertaken.  This is considered entirely compatible with the requirement to allow a tenant quiet enjoyment of the property.

Between April 2018 and April 2020 landlords are only required to improve F or G rated properties before signing a new tenancy agreement. In their guidance the government states that they expect “many landlords will make improvements while a property is vacant between tenancies” and that therefore “tenant consent may not be a consideration”.

The guidance issued goes on to consider this area in more detail.

“One issue which landlords should consider is whether or not they have the right to carry out improvement works under the terms of an existing tenancy. Landlord rights of entry to undertake work on a property typically only extends to the carrying out of repairs or maintenance, rather than making ‘improvements’. As a majority of the measures landlords can install to meet the minimum standard will be considered improvements, a landlord may not have an automatic right of entry to install the measure or measures, and tenant consent may be necessary.

“On the other hand, if the tenancy agreement specifically gives the landlord right of entry to undertake ‘improvement works’, tenant consent may not be necessary. In all cases the wording of individual tenancies will dictate what is and is not permissible without consent.”

Additionally, landlords are reminded that they are under an obligation to make reasonable efforts to obtain third party consents and should not behave in such as manner as would discourage third party consent being granted.

“The Regulations require the landlord to make ‘reasonable efforts’ to obtain third party consent. Reasonable efforts may include attempts on a number of separate occasions and using a number of different available means of communication to secure agreement from, for example, a tenant or superior landlord, with evidence to show this had been done (in the case of planning consent refusal, evidence of a single application and subsequent refusal is likely to be sufficient evidence).

“Broadly speaking, it is thought that that it will not be reasonable for the landlord to comply with a condition which may reduce the landlord’s ability to let the property or if it involves unreasonable costs.”

WARNING:  Since setting the MEES, the Government has begun a consultation regarding the funding of improvements.  Instead of requiring “no cost” to the landlord they are now proposing a monetary cap on the cost of improvements required for each property – see note below.

A Landlord is only required to make improvements to meet the minimum standard if they can do so at no cost to themselves.  No cost funding can come from a range of sources including:

  • Green Deal Finance,
  • ECO help to heat funding,
  • Local Authorities home energy efficiency grants,
  • tenants,
  • any other source not repaid by the landlord,
  • any combination of the above.

For general advice and assistance on energy efficiency funding, landlords can contact the Energy Savings Advice Service on 0300 123 1234.  For scheme specific information landlords should:

  • Green Deal Finance: Search for a local Green Deal Provider (details can be found on the Green Deal Finance Company website www.gdfc.co.uk) or through the enquiry form on the GDFC website;
  • ECO help to heat programme: Contact the Energy Savings Advice Service on 0300 123 1234, (where appropriate the landlord may need to ask their tenant to contact ESAS themselves);
  • Local Authority funding: Contact their local Authorities for information on any home energy efficiency grants available.

 

Note: The New BEIS Consultation

On 19th December 2017 the Department of Business, Energy and Industrial Strategy (BEIS) launched a new consultation to amend the regulations.  The consultation is due to conclude on 13 March 2018, just a few weeks before the current regulations take effect on 1st April 2018.  The consultation states:

“We’re seeking views on the government’s proposal to amend the domestic Minimum Level of Energy Efficiency Regulations to introduce a capped landlord financial contribution element.

“This proposal is designed to future-proof the regulations and make them as effective as possible, while protecting landlords against excessive cost burdens. With a cost-cap, domestic landlords would only need to see investment in improvements to an EPC F or G rated property up to the value of that cap. The government’s preferred cap level is £2,500 per property. A range of additional, alternative, cap options are set out in the consultation and the associated consultation impact assessment.

“The consultation is intended for all interested parties including landlords and tenants, local government, energy suppliers, energy assessors, small and large businesses, consumers, and the general public.”

Further information can be found on the BEIS website on GOV.UK

The guidance issued by the Department for Business, Energy & Industrial Strategy on this subject is very clear.  It states:

There are no specified materials or improvement measures; a landlord is free to do whatever they like with their property so long as the EPC rating can be raised to meet the Minimum Energy Efficiency Standard. The most assessable source of advice would be the recommended measures section on EPC for the property, but landlords can seek advice from other suitably qualified experts if they wish.

Holiday lets, together with rooms in hotels and bed & breakfast accommodation are typically let under a licence to occupy, rather than a tenancy.  Therefore, this type of rental property is normally outside of the scope of the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 and not required to meet the MEES.

If there are any concerns about whether a property is occupied under a licence or a tenancy, and whether the landlord is subject to the Regulations, independent specialist legal advice should be sought.

HMOs are not excluded from the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015. The Regulations apply to all privately rented properties that are legally required to have an EPC, and where rooms are let on one of the qualifying types of tenancy (most likely assured tenancies). An HMO will be in scope where it meets these criteria.

However, individual rooms within HMOs are not required to have their own EPC, so a property which is an HMO will only have an EPC if one is required for the property as a whole (typically this will be if the property has been build, sold or rented as a single unit at any time in the past 10 years). If an HMO is legally required to have an EPC, and if it is let on one of the qualifying tenancy types, then it will be required to comply with the minimum level of energy efficiency.

NB:  Many HMOs are run on a commercial basis and as such are business premises.  Where this is the case they would normally require a non-domestic EPC like a hotel, hostel, care home or student accommodation block rather than a domestic EPC.

The tenancy types that the Minimum Energy Efficiency Standard (MEES) applies to are:

  • An assured tenancy (including an assured short hold tenancy) defined in the Housing Act 1988.
  • A regulated tenancy defined in the Rent Act 1977.
  • An agricultural tenancy as set out in the Energy Efficiency (Domestic Private Rented Property) Order 2015.

The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 only apply to tenancies in the private rented sector.  They do not apply to properties owned by councils and social landlords.  Similarly, they do not apply to properties occupied under licence without a qualifying tenancy.

Whilst the exemptions are relatively straight forward, applying them is more complex and can also involve understanding the separate regulations that apply to both Energy Performance Certificates and the Minimum Energy Efficiency Standards.  There are some organisations suggesting that landlords can easily avoid improving their buildings by claiming an exemption.  Our experience is that this is more difficult than it first appears and could easily cost more than improving the building to meet the standards.

Exempt buildings and tenancies

Not all buildings and tenancies fall within The Energy Efficiency (Private Rental Property) (England and Wales) Regulations 2015.  The MEES do not apply to:

  • Buildings that have not been legally required to have an EPC.  These can include some listed buildings (see our specific notes on this topic), temporary properties, some HMOs and holidays lets.  It will also apply if the property has not been built, sold, let or significantly altered since the introduction of EPCs.
  • Buildings without a valid EPC.  This would include buildings where the EPC is over ten years old when it is relied upon for the MEES regulations.
  • Buildings only with a voluntary EPC.  An EPC may have been lodged for any number of reasons.  EPCs completed for purposes other than the construction, sale, let or significant alteration of the building, including those lodged in a mistaken understanding that one was required, are known as voluntary EPCs.  A building is only subject to MEES if the EPC was legally required.  NB: There is currently no way to tell this from the EPC itself and so you will need to know the history of whether or not the building has legally required an EPC.
  • Buildings occupied solely under licence.  MEES only applies to buildings occupied under a “Relevant Tenancy”.  This includes an assured tenancy, a regulated tenancy and domestic agricultural tenancies.  If the occupier is present only under a licence to occupy the MEES requirements will not apply as there is no tenancy.
  • Social housing schemes.  The regulations apply only to privately rented properties.  Social housing is exempt from MEES regardless of its condition, quality, or EPC rating.

Exemptions from making improvements

There are a number of circumstances where an exemption or multiple exemptions from making improvements can be claimed.  Where an exemption of this type is claimed, it may be possible to continue to rent out a substandard property.  However, all exemptions of this nature must be lodged on the PRS Exemptions Register.

Additionally, it should be noted that specific supporting evidence is required before registering an exemption on the PRS Exemptions Register.  We can provide specialist advice in this area as part of our service but would always caution clients that meeting these requirements can cost significantly more than making improvements to meet the MEES.  This will obviously depend upon the building and the improvements required but changing a few lights will likely be cheaper than obtaining professional services to prove a property will be devalued for example.

Registered exemptions are also non-transferable.  At best they are valid for a maximum of five years but a change in tenant or sale to a new landlord will normally mean the process (and costs involved) will have to be repeated.  Only then can new exemptions be registered.  There are also significant penalties for making a false or misleading declaration on the PRS Exemptions Register.

The main exemptions from making an improvement are:

  • All relevant improvements have been made – Where all the improvements suggested have been made and the property still remains below the MEES.
  • Incompatible wall insulation improvements – Where independent experts conclude that it is inappropriate to make the wall insulation improvements suggested as they would have a negative impact on the structure or fabric of the property (or the building of which it is part).
  • Improvements which cannot be financed without cost to the landlord – Landlords are not required to make improvements where relevant “no cost” funding is not available.  However, they must attempt to take advantage of funding that is available and must be able to demonstrate this.  Improvements that do not meet the new “Golden Rule” for Green Deal funding may fall within this exemption but only if alternative funding is not available.
  • Devaluation of the property – You are not required to make an improvement where an independent surveyor determines that making it would devalue the property by more then 5% of its current market value.
  • Third Party Consent is refused – Where there is a sitting tenant you might complete the formal process required in offering to improve the property and consent may be withheld.  Equally, you may require consent from a superior landlord, a bank or building society or the local authority which may be reasonably refused.  However, you will have to demonstrate that you have applied for permission and have tried to accommodate any reasonable restrictions that they have placed upon you before you can claim this exemption.  This exemption can also be used where planning, conservation or other consents are required from statutory authorities providing it can be demonstrated that these have been applied for and refused.

Please note that every suggested improvement must be considered individually for the purposes of claiming exemptions.  It is therefore highly likely that, even where some improvements may be subject to exemptions, others will not.  In this situation, some improvements to the building will still need to be made.

The regulations set out the penalties for non-compliance with the Minimum Energy Efficiency Standards.  For domestic properties (flats, apartments, houses and other dwellings) they are:

  1. Letting a sub-standard property for less than three months when the penalty notice is served – A fine not exceeding £2,000 and publication of the penalty.
  2. Letting a sub-standard property for three months or more when the penalty notice is served – a fine not exceeding £4,000 and publication of the penalty.
  3. Registering false or misleading information in relation to an exemption – a fine not exceeding £1,000 and publication of the penalty.
  4. Failure to comply with a compliance notice – a fine not exceeding £2,000 and publication of the penalty.

Where a combination of offences have been committed by a landlord in relation to a single dwelling the fine is capped at a maximum of £5,000.

Original Sources

There are lots of independent sources of information about the new Minimum Energy Efficiency Standards (MEES).  However, we have found many seem somewhat misleading and/or hold a significant bias.  Here at Rowleys Commercial Energy Assessments Limited we believe it is important to provide information that is as accurate and unbiased as possible to enable those affected to form their own opinion as to the actions they should take.  As such, we would refer you to the original regulations and the official guidance published by the Government.  These are the same sources that we primarily rely upon when advising our clients.

Guidance for non-domestic properties – click here

Guidance for domestic properties – click here

Secondary Sources

Having read the original sources you may wish to consider further analysis.  The articles below are publicly available and offer some analysis of particular aspects of the standards.  Please note that we cannot accept any responsibility for the accuracy or content of external sites.

The Guardian – 5 Feb 2015

Residential Landlords Association

Pinsent Masons LLP

Bradley Mason LLP – 14 March 2017

Michelmores LLP – Solicitors (Application to listed buildings)

Bond Dickinson LLP – Solicitors (Exploration of exemptions)

 

The Minimum Energy Efficiency Standards (MEES) for England and Wales are set out in The Energy Efficiency (Private Rental Property) (England and Wales) Regulations 2015.  These regulations were made as directed by The Energy Act 2011.  Scotland has its own system for improving the energy efficiency of buildings which includes the Section 63 requirements for large non-domestic properties.

These regulations, providing only for a few specific exemptions, require that all privately rented properties must meet of exceed the minimum standards set.  This is established in terms of the EPC rating for the property and has initially been set at an “E” rating.  As the regulations take effect it will be increasingly difficult to let properties with an “F” or “G” rating without first improving them.

 

We know our limitations and we are specialists in energy efficiency.  As such we are not in a position to provide legal advice.  Whilst we can highlight some of the issues that you may face, we’re sorry but you will need to obtain specialist legal advice to fully understand the legal implications of MEES on your portfolio.

However, this is a big issue and you will find lots of discussions about possible implications on the Internet and in the media.  We have identified some below:

UK Green Building Council Article

Residential Landlords Association

There is a lot of confusion about exemptions relating to listed buildings and buildings within a formally designated conservation area.  Firstly, the exemptions that exist appear to vary between administrations in the UK and are different for different forms of assessment.  Secondly, the supporting guidance, particularly in England & Wales, is regularly updated and can appear inconsistent or incomprehensible.

Air Conditioning Energy Assessments & Display Energy Certificates

Dealing first with these two assessments, the need for compliance is not affected by the historic nature or otherwise of the building.  As such, no exemptions from the requirements for these assessments exist specifically for buildings that are listed or in formally designated conservation areas.

Listed buildings and those in formally designated conservation areas are treated as any other building is treated and require Air Conditioning Energy Assessments (ACEAs) and Display Energy Certificates (DECs) if they meet the other qualifying criteria.

Buildings in Scotland

The Scottish Government has not attempted to exempt listed buildings or buildings in formally designated conservation areas from their regulations for energy efficiency.  Instead, they have taken an approach where an assessor is required to consider the impact of improvement measures and their appropriateness for the specific building in question.   As such, no exemptions from the requirement for an Energy Performance Certificate exist specifically for buildings that are listed or in formally designated conservation areas. [Click here to see guidance]

Listed buildings and those in formally designated conservation areas in Scotland require Energy Performance Certificates (EPCs) and Section 63 Action Plans if they meet the other qualifying criteria.

Buildings in England & Wales

Put politely, the situation for buildings in England and Wales is about as clear as mud.  The wording in the current regulations is taken directly from the European Directive and says “buildings officially protected as part of a designated environment or because of their special architectural or historical merit, in so far as compliance with certain minimum energy performance requirements would unacceptably alter their character or appearance.”

When these regulations were enacted on 9th January 2013, it was generally accepted that listed buildings were exempt from the requirement for an EPC for sale or let although it was acknowledged that they would still require an EPC in other circumstances (e.g. Green Deal).  This belief was re-enforced by guidance published by Historic England which includes the statement “An Energy Performance Certificate (EPC) is a legal requirement when building, selling or renting a property. However, there are exemptions for certain types of building and since January 2013 listed buildings have been exempted from the need to have an EPC.”  However, Historic England’s Terms and Conditions include the usual disclaimers regarding their interpretation of the law in that the position stated was just their interpretation and that they accept no liability for its accuracy.  In the absence of enforcement action or legal precedents being set, much discussion has continued both in and out of the legal community with differing interpretations resulting.

Moving forward to the latest guidance to come from The Department of Business, Energy and Industrial Strategy, the UK Government Department which now has responsibility for EPCs.  Issued in February 2017, this update is contained within the guidance for landlords and enforcement authorities on the minimum level of energy efficiency required to let non-domestic property under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.  The advice, published in Chapter 1 on page 19 is shown below:

“There is a common misunderstanding relating to listed buildings and whether they are exempt from the requirement to obtain an EPC. Listed properties, and buildings within a conservation area, will not necessarily be exempt from the requirement to have a valid EPC and it will be up to the owner of a listed building to understand whether or not their property is required to have an EPC. Where a listed privately rented non-domestic property, or a property within a conservation area, is required to have an EPC, that property will be within scope of the minimum energy efficiency standards.

“As noted at 1.3.3 above, an EPC is not currently required for a listed property or building within a conservation area when it is sold or rented in so far as compliance with minimum energy performance requirements would unacceptably alter its character or appearance. Examples of energy performance measures which may alter character or appearance (or as a minimum are likely to require local authority planning permission to install on a listed building) include external solid wall insulation, replacement glazing, solar panels, or an external wall mounted air source heat pump. Where character or appearance would not be altered by compliance with energy performance requirements, an EPC may be legally required.

“If an owner or occupier of a listed building is unsure about whether their particular property is or is not required to have an EPC, appropriate advice should be sought at the earliest opportunity.”

Exactly the same information is contained within the equivalent publication for domestic properties which has been published more recently in October 2017.  Changes in other guidance documents issued by MHCLG (formerly DCLG) and BEIS have also been made to reflect this.  However, whilst they tend to reduce the previously special status given to listed buildings to a par with other designations including Conservation Areas, National Parks, Scheduled Monuments and protected parks and gardens, they do little to clarify exactly how far an exemption applies.

This guidance would seem to suggest that the UK Government believes the exemption for listed buildings is much more restricted than had previously become accepted.  Indeed, it would appear to be more compatible with the Scottish Government’s interpretation that the exemption is solely from making improvements that would unacceptably alter the protected building’s character or appearance and not from the entirety of the process.  Similarly, it would appear to reflect an expectation that reasonable improvements, particularly where these would improve the energy efficiency of a building whose performance is currently very poor, should be carried out.

This is not without merit or logic. At the current time, an EPC in itself does not mandate that any works actually be carried out. The recommendations are just that, recommendations. Therefore a view could be formed that having an EPC can never unacceptably alter the character or appearance of the building. As such it could be argued no building can claim exemption from having an EPC on these grounds alone. Additionally, the current requirements under the MEES include provision for exemptions from making specific improvements where required third party consent cannot be obtained. Hence, if Listed Building Consent cannot be obtained from the relevant authorities no unacceptable alteration to the character or appearance of the building is required and so again, there is no need to apply this exemption from having an EPC.

Many councils provide guidance on improving historic buildings with Westminster City Council providing some of the most extensive and practicable advice we have found. This includes a document titled “Energy Efficiency in Conservation Areas” which discusses improvements that can be made without damaging historic structures.

Whilst Historic England seem yet to update their specific guidance on this limited exemption, they do provide a wealth of information for those wishing to improve historic buildings without damaging their character and appearance.  Indeed, they acknowledge that ensuring a building remains useful and occupied is often the best way of protecting it for the future.  Additionally, some energy improvement measures can also improve fire safety and resilience in historic buildings.  It should be remembered that it was never the intent of the protection schemes to freeze buildings in time but instead to ensure that they are managed with appropriate sympathy and conserved for the future.

The background to this issue is also explored in a recent article by The Residential Landlords Association.  They make the following observation in relation to the exemption of Listed Buildings from EPCs:

“So in reality, in terms of an EPC, the caveat is meaningless. Therefore, a landlord cannot know if an EPC is needed before they have an EPC for the property”

This article continues to draw the following overall conclusion:

“Regrettably, we simply do not know the answer to whether or not an EPC is required for a listed building; nor whether landlords who have rented out listed buildings will have to comply with Minimum Energy Efficiency Standards (subject to any other available exemption, e.g. limiting the amount they have to spend); or whether you need an EPC for a listed building in order to be able to rely on regaining possession under Section 21 of the Housing Act 1988. What is clear is that if you have no EPC then you do not have to comply with Minimum Energy Efficiency Standards from 2018 onwards. You could be liable for a penalty for not having an EPC and equally you might not be able to get possession back relying on Section 21. This is a wholly unsatisfactory state of affairs which needs to be addressed by the Government.”

Interestingly, at a recent industry conference (Spring 2018), representatives of both MHCLG and BEIS confirmed that they believed Listed Buildings should have EPCs completed and that recommendations should be implemented wherever possible but with appropriate sympathy to the building as a whole.  They were unaware of the conflicting guidance from Historic England which they accepted may be the source of a lot of the current confusion and undertook to attempt to ensure that Historic England updated their guidance to more accurately reflect the limitations of any exemptions which may be available.

Unfortunately, as energy assessors, we are not in a position to provide legal advice but present this information to help you form your own opinion.  However, we would point out that there is currently nothing to stop an EPC being completed on a voluntary basis even when one is not required by law.  This may have its own implications and so building owners and occupiers should seek their own legal advice but voluntary compliance may provide a suitable solution.

Some listed buildings in England & Wales may be exempt from some or all of the Energy Performance Certificate (EPC) and Minimum Energy Efficiency Standards (MEES) requirements.  However, specific legal advice should be sought on a case by case basis.  It is unlikely that an exemption can be demonstrated without first having an EPC completed to confirm the recommendations proposed.

Buildings within formally designated conservation areas are less likely to be subject to exemptions.

There are lots of reasons you may wish to check a Domestic EPC.  You might want to find out if you already have a valid EPC for your property or see what improvements you can make to save money on your energy bills.  You may have lost a paper copy of a certificate and need to obtain a replacement.

In the United Kingdom all EPC’s have to be lodged on central registers for each administration.  These registers are available online to search and download EPC reports in pdf format.  Each administration has its own register and you must comply with the terms and conditions for using these sites.  Typically you can search using the postcode and address or the Report Reference Number printed on the report or provided by the Energy Assessor.

England & Wales

In England and Wales the central register held by the Department for Communities and Local Government.

www.epcregister.com

Scotland

In Scotland all Domestic EPC’s have to be lodged on a central register held by the Energy Saving Trust.

www.scottishepcregister.org.uk

Northern Ireland

In Northern Ireland all Domestic EPC’s have to be lodged on a central register held by the Department of Finance and Personnel.

www.epbniregister.com

You may have heard about the Green Deal initiative or seen reference to it on your Energy Performance Certificate.  Green Deal was a government backed scheme to help fund improvements that would bring about savings to your energy bills.  Under the scheme the government would fund loans to help meet the initial cost of the improvements which you would then pay back as part of your future energy bills.  The idea was that the repayment costs would be offset by the savings in your bill so you would not have to find the extra money to pay for the improvement.  However, the government has stopped funding the Green Deal Finance Company which was set up to lend money to Green Deal providers to fund improvements under the scheme.

The scheme is now operating in a new format and is funding some projects.  A full relaunch is expected soon and Green Deal assessments are still available.  You can find out about the scheme by visiting the Green Deal Finance Company website.

However, Green Deal finance is not the only way you can fund improvements and other financial packages are available.  In addition to normal loans there are specialist financial packages and grants available.  Some of these take the form of more traditional loans and mortgages which could still be repaid from savings in the energy bill and may offer lower interest rates.  We make no recommendation in relation to any of the financial packages available and advise that you seek your own independent financial advice.

Other providers include:

Major banks and building societies

Ecology Building Society – Sustainable savings and mortgages

Portman Asset Finance – Finance for businesses to install renewable technologies

Carbon Trust Financing – General information, grants and loans

Salix Finance – Funding for the public sector

A Domestic Energy Performance Certificate (commonly called an EPC) contains information about a property’s energy use and typical energy costs.  It also provides recommendations about improvements that can be made to reduce energy use and save money.  An EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient) and is valid for 10 years.

Minimum Energy Efficiency Standards (MEES Non-Domestic)

The new Minimum Energy Efficiency Standards (MEES) for non-domestic buildings have now come into effect in England & Wales.  Landlords are now unable to sign a new lease, renew a lease or extend a lease unless the building either achieves an EPC rating of at least E or a permitable exemption is registered.  From April 2023 it will be unlawful to continue to let a non-domestic property which has legally required an EPC without an EPC rating of at least an E unless a permitable exemption is registered.

Here at Rowleys Commercial Energy Assessments Limited we can help you comply with these regulations. Taking action now will help to protect both the value of your asset and your future rental income.  We have a five step plan for all landlords to help minimise your costs:

  1. Baseline EPC - Have all your properties surveyed by a reputable assessor with specialist additional insurance and have EPCs (at least in draft) produced that represent them all in their current state.  This will help to identify properties that might be at risk now or in the future giving you a baseline for your portfolio no matter what its size.
  2. Lodge Good EPCs - Decide the minimum standard you want to achieve for your portfolio.  You can then get the EPCs that achieve this rating lodged on the National Register.  Under the current rules, they will then be valid for the next ten years.
  3. Obtain Refurbishment Reports - For the remaining properties, obtain expert advice and modelling to find the most cost-effective ways of getting these up to standard.  There are often cheaper and less disruptive ways of improving the building and increasing its EPC rating than making the minimum improvements suggested in the EPC's Recommendations Report.  We provide this service in the form of a EPC Refurbishment Report which explains your current position and provides possible improvements you could make to meet the MEES.
  4. Improve Less Efficient Properties - You can now plan the improvement of less efficient properties in your portfolio.  You can potentially achieve this at the tenant’s expense through maintenance clauses in the lease agreement or through dilapidations at the end of a tenancy but will need to seek professional advice based upon your lease agreements (being energy assessors we're sorry but we can't help you with this bit as we don't provide legal advice). Once the improvements have been made, get a new EPC completed and lodged - this bit we can complete for you!
  5. Protect Your Asset - Having got your property up to standard don't let your tenants downgrade your rating.  Seek legal advice and add tenancy terms that protect the EPC rating of your property.  Make tenants seek permission for changes and prohibit them from commissioning their own EPC for lodgement on the National Register without your permission as you don't want your good EPC overwritten with a poorer one.  Whilst we can't provide legal advice, we can help advise you as to the sorts of changes that will affect the EPC rating and we can also evaluate proposed changes to see what the effect on the EPC will be.

When you come to us we will only charge you for the work we have to actually complete to help you achieve compliance.  Initially we can check your portfolio to see which properties need to be surveyed and which already appear to have appropriate EPCs.  We can also undertake sample checking to confirm the accuracy of the EPCs if you wish.  At each stage we only take forward the properties you instruct us to, you don't have to commit to the entire process for your whole portfolio in one go helping you spread the cost and target your most valuable or at risk properties.

If you are interested in finding out more about how we can help your portfolio meet the new Minimum Energy Efficiency Standards (MEES) please contact us to discuss your specific requirements.  We also provide services for domestic properties and so can also handle mixed property portfolios.

FAQ: Commercial MEES Assessments

Whilst the exemptions are relatively straight forward, applying them is more complex and can also involve understanding the separate regulations that apply to both Energy Performance Certificates and the Minimum Energy Efficiency Standards.  There are some organisations suggesting that landlords can easily avoid improving their buildings by claiming an exemption.  Our experience is that this is more difficult than it first appears and could easily cost more than improving the building to meet the standards.

Exempt buildings and tenancies

Not all buildings and tenancies fall within The Energy Efficiency (Private Rental Property) (England and Wales) Regulations 2015.  The MEES do not apply to:

  • Buildings that have not been legally required to have an EPC.  These can include non-domestic buildings with a low energy demand, some places of worship, some listed buildings (see our specific notes on this topic), temporary properties and holidays lets.
  • Buildings without a valid EPC.  This would include buildings where the EPC is over ten years old when it is relied upon for the MEES regulations and those where an EPC has never been completed.
  • Buildings only with a voluntary EPC.  An EPC may have been lodged for any number of reasons.  EPCs completed for purposes other than the sale or let of the building, including those lodged in a mistaken understanding that one was required, are known as voluntary EPCs.  A building is only subject to MEES if the EPC was legally required.  NB: There is currently no way to tell this from the EPC itself and so you will need to know the history of whether or not the building has legally required an EPC.
  • Short tenancies.  This applies to tenancies of less than six months with no right of renewal.
  • Long tenancies.  This applies to tenancies of over 99 years.

Exemptions from making improvements

There are a number of circumstances where an exemption or multiple exemptions from making improvements can be claimed.  Where an exemption of this type is claimed, it may be possible to continue to rent out a substandard property.  However, all exemptions of this nature must be lodged on the PRS Exemptions Register.

Additionally, it should be noted that specific supporting evidence is required before registering an exemption on the PRS Exemptions Register.  We can provide specialist advice in this area as part of our service but would always caution clients that meeting these requirements can cost significantly more than making improvements to meet the MEES.  This will obviously depend upon the building and the improvements required but changing a few lights will likely be cheaper than obtaining professional services to prove a property will be devalued for example.

Registered exemptions are also non-transferable.  At best they are valid for a maximum of five years but a change in tenant or sale to a new landlord will normally mean the process (and costs involved) will have to be repeated.  Only then can new exemptions be registered.  There are also significant penalties for making a false or misleading declaration on the PRS Exemptions Register.

The main exemptions from making an improvement are:

  • No improvements are possible – Where independent experts conclude that it is impossible to make the improvements suggested on the EPC as they are physically incompatible with the construction of the property or would damage it.
  • Devaluation of the property – You are not required to make an improvement where an independent surveyor determines that making it would devalue the property by more then 5% of its current market value.
  • Third Party Consent is refused – Where there is a sitting tenant you might complete the formal process required in offering to improve the property and consent may be withheld.  Equally, you may require consent from a superior landlord, a bank or building society or the local authority which may be reasonably refused.  However, you will have to demonstrate that you have applied for permission and have tried to accommodate any reasonable restrictions that they have placed upon you before you can claim this exemption.
  • The Seven Year Payback Test – It is expected that any improvement made will recoup its cost within seven years from the savings that will occur in the subsequent energy bills.  The Government has defined a specific methodology for calculating this and the guidance advises most landlords to engage the services of a competent professional to perform these calculations on their behalf.  If it can be demonstrated that the improvement does not meet this requirement an exemption can be claimed.

Please note that every suggested improvement must be considered individually for the purposes of claiming exemptions.  It is therefore highly likely that, even where some improvements may be subject to exemptions, others will not.  In this situation, some improvements to the building will still need to be made.

The regulations set out the penalties for non-compliance with the Minimum Energy Efficiency Standards.  For non-domestic properties (shops, offices, industrial & agricultural buildings and other non-dwellings) they are:

  1. Letting a sub-standard property for less than three months when the penalty notice is served – a fine not exceeding the greater of £5,000 or 10% of the rateable value up to a maximum of £50,000 and publication of the penalty.
  2. Letting a sub-standard property for three months or more when the penalty notice is served – a fine not exceeding the greater of £10,000 or 20% of the rateable value up to a maximum of £150,000 and publication of the penalty.
  3. Registering false or misleading information in relation to an exemption – a fine not exceeding £5,000 and publication of the penalty.
  4. Failure to comply with a compliance notice – a fine not exceeding £5,000 and publication of the penalty.

Original Sources

There are lots of independent sources of information about the new Minimum Energy Efficiency Standards (MEES).  However, we have found many seem somewhat misleading and/or hold a significant bias.  Here at Rowleys Commercial Energy Assessments Limited we believe it is important to provide information that is as accurate and unbiased as possible to enable those affected to form their own opinion as to the actions they should take.  As such, we would refer you to the original regulations and the official guidance published by the Government.  These are the same sources that we primarily rely upon when advising our clients.

Guidance for non-domestic properties – click here

Guidance for domestic properties – click here

Secondary Sources

Having read the original sources you may wish to consider further analysis.  The articles below are publicly available and offer some analysis of particular aspects of the standards.  Please note that we cannot accept any responsibility for the accuracy or content of external sites.

The Guardian – 5 Feb 2015

Residential Landlords Association

Pinsent Masons LLP

Bradley Mason LLP – 14 March 2017

Michelmores LLP – Solicitors (Application to listed buildings)

Bond Dickinson LLP – Solicitors (Exploration of exemptions)

 

The Minimum Energy Efficiency Standards (MEES) for England and Wales are set out in The Energy Efficiency (Private Rental Property) (England and Wales) Regulations 2015.  These regulations were made as directed by The Energy Act 2011.  Scotland has its own system for improving the energy efficiency of buildings which includes the Section 63 requirements for large non-domestic properties.

These regulations, providing only for a few specific exemptions, require that all privately rented properties must meet of exceed the minimum standards set.  This is established in terms of the EPC rating for the property and has initially been set at an “E” rating.  As the regulations take effect it will be increasingly difficult to let properties with an “F” or “G” rating without first improving them.

 

We know our limitations and we are specialists in energy efficiency.  As such we are not in a position to provide legal advice.  Whilst we can highlight some of the issues that you may face, we’re sorry but you will need to obtain specialist legal advice to fully understand the legal implications of MEES on your portfolio.

However, this is a big issue and you will find lots of discussions about possible implications on the Internet and in the media.  We have identified some below:

UK Green Building Council Article

Residential Landlords Association

There is a lot of confusion about exemptions relating to listed buildings and buildings within a formally designated conservation area.  Firstly, the exemptions that exist appear to vary between administrations in the UK and are different for different forms of assessment.  Secondly, the supporting guidance, particularly in England & Wales, is regularly updated and can appear inconsistent or incomprehensible.

Air Conditioning Energy Assessments & Display Energy Certificates

Dealing first with these two assessments, the need for compliance is not affected by the historic nature or otherwise of the building.  As such, no exemptions from the requirements for these assessments exist specifically for buildings that are listed or in formally designated conservation areas.

Listed buildings and those in formally designated conservation areas are treated as any other building is treated and require Air Conditioning Energy Assessments (ACEAs) and Display Energy Certificates (DECs) if they meet the other qualifying criteria.

Buildings in Scotland

The Scottish Government has not attempted to exempt listed buildings or buildings in formally designated conservation areas from their regulations for energy efficiency.  Instead, they have taken an approach where an assessor is required to consider the impact of improvement measures and their appropriateness for the specific building in question.   As such, no exemptions from the requirement for an Energy Performance Certificate exist specifically for buildings that are listed or in formally designated conservation areas. [Click here to see guidance]

Listed buildings and those in formally designated conservation areas in Scotland require Energy Performance Certificates (EPCs) and Section 63 Action Plans if they meet the other qualifying criteria.

Buildings in England & Wales

Put politely, the situation for buildings in England and Wales is about as clear as mud.  The wording in the current regulations is taken directly from the European Directive and says “buildings officially protected as part of a designated environment or because of their special architectural or historical merit, in so far as compliance with certain minimum energy performance requirements would unacceptably alter their character or appearance.”

When these regulations were enacted on 9th January 2013, it was generally accepted that listed buildings were exempt from the requirement for an EPC for sale or let although it was acknowledged that they would still require an EPC in other circumstances (e.g. Green Deal).  This belief was re-enforced by guidance published by Historic England which includes the statement “An Energy Performance Certificate (EPC) is a legal requirement when building, selling or renting a property. However, there are exemptions for certain types of building and since January 2013 listed buildings have been exempted from the need to have an EPC.”  However, Historic England’s Terms and Conditions include the usual disclaimers regarding their interpretation of the law in that the position stated was just their interpretation and that they accept no liability for its accuracy.  In the absence of enforcement action or legal precedents being set, much discussion has continued both in and out of the legal community with differing interpretations resulting.

Moving forward to the latest guidance to come from The Department of Business, Energy and Industrial Strategy, the UK Government Department which now has responsibility for EPCs.  Issued in February 2017, this update is contained within the guidance for landlords and enforcement authorities on the minimum level of energy efficiency required to let non-domestic property under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.  The advice, published in Chapter 1 on page 19 is shown below:

“There is a common misunderstanding relating to listed buildings and whether they are exempt from the requirement to obtain an EPC. Listed properties, and buildings within a conservation area, will not necessarily be exempt from the requirement to have a valid EPC and it will be up to the owner of a listed building to understand whether or not their property is required to have an EPC. Where a listed privately rented non-domestic property, or a property within a conservation area, is required to have an EPC, that property will be within scope of the minimum energy efficiency standards.

“As noted at 1.3.3 above, an EPC is not currently required for a listed property or building within a conservation area when it is sold or rented in so far as compliance with minimum energy performance requirements would unacceptably alter its character or appearance. Examples of energy performance measures which may alter character or appearance (or as a minimum are likely to require local authority planning permission to install on a listed building) include external solid wall insulation, replacement glazing, solar panels, or an external wall mounted air source heat pump. Where character or appearance would not be altered by compliance with energy performance requirements, an EPC may be legally required.

“If an owner or occupier of a listed building is unsure about whether their particular property is or is not required to have an EPC, appropriate advice should be sought at the earliest opportunity.”

Exactly the same information is contained within the equivalent publication for domestic properties which has been published more recently in October 2017.  Changes in other guidance documents issued by MHCLG (formerly DCLG) and BEIS have also been made to reflect this.  However, whilst they tend to reduce the previously special status given to listed buildings to a par with other designations including Conservation Areas, National Parks, Scheduled Monuments and protected parks and gardens, they do little to clarify exactly how far an exemption applies.

This guidance would seem to suggest that the UK Government believes the exemption for listed buildings is much more restricted than had previously become accepted.  Indeed, it would appear to be more compatible with the Scottish Government’s interpretation that the exemption is solely from making improvements that would unacceptably alter the protected building’s character or appearance and not from the entirety of the process.  Similarly, it would appear to reflect an expectation that reasonable improvements, particularly where these would improve the energy efficiency of a building whose performance is currently very poor, should be carried out.

This is not without merit or logic. At the current time, an EPC in itself does not mandate that any works actually be carried out. The recommendations are just that, recommendations. Therefore a view could be formed that having an EPC can never unacceptably alter the character or appearance of the building. As such it could be argued no building can claim exemption from having an EPC on these grounds alone. Additionally, the current requirements under the MEES include provision for exemptions from making specific improvements where required third party consent cannot be obtained. Hence, if Listed Building Consent cannot be obtained from the relevant authorities no unacceptable alteration to the character or appearance of the building is required and so again, there is no need to apply this exemption from having an EPC.

Many councils provide guidance on improving historic buildings with Westminster City Council providing some of the most extensive and practicable advice we have found. This includes a document titled “Energy Efficiency in Conservation Areas” which discusses improvements that can be made without damaging historic structures.

Whilst Historic England seem yet to update their specific guidance on this limited exemption, they do provide a wealth of information for those wishing to improve historic buildings without damaging their character and appearance.  Indeed, they acknowledge that ensuring a building remains useful and occupied is often the best way of protecting it for the future.  Additionally, some energy improvement measures can also improve fire safety and resilience in historic buildings.  It should be remembered that it was never the intent of the protection schemes to freeze buildings in time but instead to ensure that they are managed with appropriate sympathy and conserved for the future.

The background to this issue is also explored in a recent article by The Residential Landlords Association.  They make the following observation in relation to the exemption of Listed Buildings from EPCs:

“So in reality, in terms of an EPC, the caveat is meaningless. Therefore, a landlord cannot know if an EPC is needed before they have an EPC for the property”

This article continues to draw the following overall conclusion:

“Regrettably, we simply do not know the answer to whether or not an EPC is required for a listed building; nor whether landlords who have rented out listed buildings will have to comply with Minimum Energy Efficiency Standards (subject to any other available exemption, e.g. limiting the amount they have to spend); or whether you need an EPC for a listed building in order to be able to rely on regaining possession under Section 21 of the Housing Act 1988. What is clear is that if you have no EPC then you do not have to comply with Minimum Energy Efficiency Standards from 2018 onwards. You could be liable for a penalty for not having an EPC and equally you might not be able to get possession back relying on Section 21. This is a wholly unsatisfactory state of affairs which needs to be addressed by the Government.”

Interestingly, at a recent industry conference (Spring 2018), representatives of both MHCLG and BEIS confirmed that they believed Listed Buildings should have EPCs completed and that recommendations should be implemented wherever possible but with appropriate sympathy to the building as a whole.  They were unaware of the conflicting guidance from Historic England which they accepted may be the source of a lot of the current confusion and undertook to attempt to ensure that Historic England updated their guidance to more accurately reflect the limitations of any exemptions which may be available.

Unfortunately, as energy assessors, we are not in a position to provide legal advice but present this information to help you form your own opinion.  However, we would point out that there is currently nothing to stop an EPC being completed on a voluntary basis even when one is not required by law.  This may have its own implications and so building owners and occupiers should seek their own legal advice but voluntary compliance may provide a suitable solution.

Some listed buildings in England & Wales may be exempt from some or all of the Energy Performance Certificate (EPC) and Minimum Energy Efficiency Standards (MEES) requirements.  However, specific legal advice should be sought on a case by case basis.  It is unlikely that an exemption can be demonstrated without first having an EPC completed to confirm the recommendations proposed.

Buildings within formally designated conservation areas are less likely to be subject to exemptions.

You may have heard about the Green Deal initiative or seen reference to it on your Energy Performance Certificate.  Green Deal was a government backed scheme to help fund improvements that would bring about savings to your energy bills.  Under the scheme the government would fund loans to help meet the initial cost of the improvements which you would then pay back as part of your future energy bills.  The idea was that the repayment costs would be offset by the savings in your bill so you would not have to find the extra money to pay for the improvement.  However, the government has stopped funding the Green Deal Finance Company which was set up to lend money to Green Deal providers to fund improvements under the scheme.

The scheme is now operating in a new format and is funding some projects.  A full relaunch is expected soon and Green Deal assessments are still available.  You can find out about the scheme by visiting the Green Deal Finance Company website.

However, Green Deal finance is not the only way you can fund improvements and other financial packages are available.  In addition to normal loans there are specialist financial packages and grants available.  Some of these take the form of more traditional loans and mortgages which could still be repaid from savings in the energy bill and may offer lower interest rates.  We make no recommendation in relation to any of the financial packages available and advise that you seek your own independent financial advice.

Other providers include:

Major banks and building societies

Ecology Building Society – Sustainable savings and mortgages

Portman Asset Finance – Finance for businesses to install renewable technologies

Carbon Trust Financing – General information, grants and loans

Salix Finance – Funding for the public sector

Modern Slavery Statement

This statement is made pursuant to s.54 of the Modern Slavery Act 2015 and sets out the steps that Rowleys Commercial Energy Assessment Limited has taken and is continuing to take to ensure that modern slavery or human trafficking is not taking place within our business or supply chain.

The policy’s purpose is to:

  • Prevent modern slavery in all its forms.

  • Ensure compliance with the Modern Slavery Act 2015 for both ourselves and those that use our services.

Modern slavery encompasses slavery, servitude, human trafficking and forced labour. Rowleys Commercial Energy Assessment Limited has a zero tolerance approach to any form of modern slavery. We are committed to acting ethically and with integrity and transparency in all business dealings and to putting effective systems and controls in place to safeguard against any form of modern slavery taking place within the business or our supply chain.

Our business

Rowleys Commercial Energy Assessment Limited provides energy efficiency assessments, consultancy and related services throughout the UK. These activities are carried out using a combination of our own employees and carefully selected sub-contractors.

Our high risk areas

The vast majority of our work is conducted by staff directly employed by us and all of our work is conducted within the UK minimising our exposure to modern slavery practices. More vulnerable areas of our business include:

  1. Use of sub-contractors: We ensure that our sub-contractors are registered with a government approved Accreditation Scheme (Approved Organisation in Scotland) for the area of work which they are conducting on our behalf. Proof of entitlement to work in the UK is a mandatory part of the registration process. Additionally, we do not use employment agencies, gangmasters or assessment panels to recruit workers or sub-contractors.

  2. Supplier purchases: Our business does not involve the processing of materials and so our purchasing is limited to operational services and supplies, the majority of which are of low value and sourced within the UK. Suppliers of high value purchases are actively screened (see below) while all staff engaged in making purchases on behalf of the company have received Modern Slavery awareness training.

Our policies

We operate a number of internal policies and procedures to ensure that we are conducting business in an ethical and transparent manner. These include:

  1. The measures established in this Modern Slavery Statement.

  2. Our Anti-Bribery Statement (FC17M01) which clearly establishes the organisation’s stance and expectations relating to bribery and questionable incentive practices.

  3. Our policy Health & Safety at Work (HS16G01) which clearly establishes the organisation’s stance and expectations relating to the health, safety and welfare of our workers and other affected by our work.

  4. Our policy Equality & Diversity (PE16D01) which clearly establishes the organisation’s stance and expectations relating to equal opportunities and challenging discrimination.

  5. Robust recruitment practices, including conducting eligibility to work in the UK checks for all employees to safeguard against human trafficking or individuals being forced to work against their will.

  6. Positive employment practices including ensuring all our employees have written contracts of employment and paying all our employees at least the National Minimum Wage. Additionally, we actively support the personal development of our staff, including providing opportunities for them to further their personal economic prospects by obtaining nationally recognised and professional qualifications.

  7. Corporate openness within our family run business. We operate in a manner where all employees know that they can raise concerns about how colleagues are being treated, or practices within our business or supply chain, without fear of reprisals.

Our suppliers

Rowleys Commercial Energy Assessment Limited maintains a list of preferred suppliers and sub-contractors. We conduct due diligence on all suppliers before allowing them to become a preferred supplier or sub-contractor.

  1. Screening for sub-contractors: We only sub-contract to our preferred sub-contractors. In selecting preferred subcontractors we routinely:

    1. Check the National Register to ensure a current accreditation exists for the services being offered;

    2. Check trading details (e.g. sole trader / registered company) and cross reference these with independent sources (e.g. Companies House);

    3. Review websites, social media pages, reviews and other online sources;

    4. Refer to prior knowledge and experience of our staff, clients and other suppliers; and

    5. Monitor assessments produced to ensure that the work is not further sub-contracted.

  2. Screening for high value preferred suppliers: We consider high value suppliers to be those supplying goods and/or services in excess of £1000 in any three month period. As part of our contract with high value suppliers, we require that they confirm to us that:

    1. They have taken steps to eradicate modern slavery within their business;

    2. They hold their own suppliers to account over modern slavery; and

    3. They pay their employees any prevailing minimum wage applicable within their country of operations, including within the UK.

  3. Screening for other suppliers: We believe it is unfortunately not practicable for any business to fully screen all suppliers used for low value items. Equally, to restrict the purchase of such items solely to preferred suppliers would potentially prevent many smaller businesses and sole traders from achieving economic independence undermining the understood intentions of the Modern Slavery Act 2015. This could be particularly discriminatory towards small local businesses around our operations in the UK which we actively try to support. As such, we adopt a pragmatic approach to small purchases where, prior to placing orders, we:

    1. Review websites, social media pages, reviews and other online sources;

    2. Refer to prior knowledge and experience of our staff, clients and other suppliers; and

    3. Consider the status, location and reputation of the organisation involved.

Our commitment

Rowleys Commercial Energy Assessment Limited wishes to make it explicitly clear that we would immediately consider terminating our relationship with any organisation should any instances of modern slavery come to light. This would include, but is not limited to, instances where:

  1. They fail to pay their employees any prevailing minimum wage applicable within their country of operations, including within the UK;

  2. They actively exploit international tax or employment arrangements to avoid paying the prevailing minimum wage in the UK;

  3. They operate in a manner which fails to protect the health, safety or welfare of their workers in a manner consistent with the established practices in their country of operations; or

  4. They operate in a manner which is inconsistent with the United Nations’ Universal Declaration on Human Rights (UDHR).

Furthermore, as a professional organisation we expect our staff and those working on our behalf to behave in a responsible manner raising any concerns that may arise in the course of their work both internally and with the appropriate authorities where applicable.

Training

We conduct training for our staff so that they understand the signs of modern slavery and what to do if they suspect that it is taking place.

Our performance indicators

We will know the effectiveness of the steps that we are taking to ensure that slavery and/or human trafficking is not taking place within our business or supply chain if:

  1. No reports are received from employees, the public, or law enforcement agencies to indicate that modern slavery practices have been identified within our business operations; and/or

  2. Reports from our employees or workers are received to indicate that modern slavery practices have been identified outside our business operations.

Approval for this statement

This statement was approved by the Board of Directors on 14 August 2017.

This policy is reviewed on an annual basis and is freely available to our customers, suppliers, employees and the general public. It is published on our website with a direct link from our homepage in accordance with best practice established in the Modern Slavery Act 2015.

Peter Rowley
Company Director
14 August 2017

Anti-Bribery Statement

Rowleys Commercial Energy Assessment Limited is committed to carrying out business fairly, honestly and openly. This means we have a zero tolerance towards bribery. We will never permit or authorise the offering, making or receiving of a bribe. There are no exceptions to this policy.

The policy’s purpose is to:

  • Set out our general policy in relation to bribery, of which all employees, contractors and other workers need to be aware.

In this policy references are made to the Company Director, Mr Peter Rowley, and the General Manager, Mr Douglas Hough. In the absence of either, all matters must be referred without undue delay to the other.

Who does this policy apply to?

This policy applies to everyone who works for us at whatever level. It will include all Directors, managers, employees (whether permanent or on fixed term contracts, full time or part-time etc.), as well as anyone who is not an employee (such as consultants, sub-contractors, agents, representatives).

Consequences of breaches of the policy for our employees and partners

Bribery is a crime. All of you, whether you are employees or Directors, if you offer, make or receive a bribe you will be breaking the law. We can also be liable for your activities. Bribery carries a sentence of up to 10 years in jail and the possibility of an unlimited fine. Any employee of ours who offers, makes or receive a bribe is very likely to be subject to disciplinary procedures (and this is likely to amount to gross misconduct and lead to dismissal in many cases).

Business consequences for us if bribery takes place

If we are involved in bribery (or those who work for us or with us or on our behalf, such as our clients, suppliers, agents or workers) there can be serious consequences. These include:

  • Damage to our reputation (including being subject to unfavourable press, TV and social media scrutiny);

  • Those who do business with us may cancel or not renew contracts with us;

  • Those who buy our goods and services may no longer do so;

  • If we are convicted of bribery we may have to pay over whatever amounts we have received from any business or contracts entered into pursuant to a bribe;

  • We could be stopped from trying to obtain work with some type of contracts with public organisations; and

  • We could be stopped from trying to obtain work from certain international bodies.

Consequences for those who provide goods and services to us

If a Company or a person who provides goods and/or services to us and has used bribery to do so we will normally wish to stop trading with them. For our agents and others acting on our behalf if they breach this policy, let alone offer, make or receive a bribe, we will wish to terminate our contracts immediately with them.

How we communicate this policy

This policy is made available in the following ways:

  • It is publicly available on our website at www.onestopepc.co.uk;

  • It is drawn to the attention of every new employee; and

  • Those working with us (employees and non-employees) who are most likely to be affected by bribery will receive additional training and support.

What you should do if you are subject to an offer of or making of a bribe or a request for a bribe?

If you are asked to make a bribe or you are offered a bribe (whether a mere offer or the actual making of it), you must of course refuse to make or receive the bribe. In normal circumstances:

  • You should explain our policy regarding bribery; and

  • You should refuse to make or receive (as the case may be) a bribe; and

  • Report the matter immediately to the General Manager who will also notify the Company Director.

We recognise that in certain circumstances you may feel that your personal safety is at risk if you are asked to make or receive a bribe. It may not be safe for you to explain our policy or to refuse or make the bribe. In such cases our first concern is for your safety. In such circumstances you will need to do what is necessary to protect yourself and then you will need to report what has occurred as soon as possible to the Company Director who will then notify the General Manager.

Recognising what is and what is not a bribe

Sometimes it is not always easy to recognise a bribe from a legitimate payment we need make or which we receive. Hospitality, gifts and charitable donations are not normally illegal and are all perfectly acceptable. They are also a normal way of establishing and building contacts and relationships with potential and actual customers as well as our suppliers.

To help you understand what is acceptable for you to receive or make in the way of gifts and hospitality, please consult the General Manager. Any charitable gift, whether made by a third party or to be made by us, needs the approval of Company Director.

Requests to make or receive payments other than those which relate to the normal course of our business must always be treated with suspicion. Consult with the General Manager about any situations or offers of payments etc. which have caused you or raise any suspicion.

Usually it will not be difficult to tell when something does not seem right. Usually it is very obvious, because what is occurring or what you are being asked to do is something which does not normally occur in your work for us. Equally, it may seem unreasonable or unethical to you as a reasonable person.

Raising concerns

We wish to encourage you to raise any concerns or suspicions you may have as soon as you have them. Even if you are not sure whether:

  • What has occurred; or

  • A payment; or

  • The actions of another employee; or

  • An action of someone who provides goods or services to us

amounts to bribery.

We urge you to raise your concerns with the General Manager. The Board of Directors wish to encourage the reporting of your concerns and suspicions and will wish it be known that if you do so you will not be subject to any disciplinary action or unfavourable treatment (or any threats relating to these). If you consider that you have been subject to such action or treatment, please use our grievance procedure.

This policy is reviewed on an annual basis and is freely available to our customers, suppliers, employees and the general public.

Peter Rowley
Company Director
06 March 2017

Are Listed Buildings exempt?

There is a lot of confusion about exemptions relating to listed buildings and buildings within a formally designated conservation area.  Firstly, the exemptions that exist appear to vary between administrations in the UK and are different for different forms of assessment.  Secondly, the supporting guidance, particularly in England & Wales, is regularly updated and can appear inconsistent or incomprehensible.

Air Conditioning Energy Assessments & Display Energy Certificates

Dealing first with these two assessments, the need for compliance is not affected by the historic nature or otherwise of the building.  As such, no exemptions from the requirements for these assessments exist specifically for buildings that are listed or in formally designated conservation areas.

Listed buildings and those in formally designated conservation areas are treated as any other building is treated and require Air Conditioning Energy Assessments (ACEAs) and Display Energy Certificates (DECs) if they meet the other qualifying criteria.

Buildings in Scotland

The Scottish Government has not attempted to exempt listed buildings or buildings in formally designated conservation areas from their regulations for energy efficiency.  Instead, they have taken an approach where an assessor is required to consider the impact of improvement measures and their appropriateness for the specific building in question.   As such, no exemptions from the requirement for an Energy Performance Certificate exist specifically for buildings that are listed or in formally designated conservation areas. [Click here to see guidance]

Listed buildings and those in formally designated conservation areas in Scotland require Energy Performance Certificates (EPCs) and Section 63 Action Plans if they meet the other qualifying criteria.

Buildings in England & Wales

Put politely, the situation for buildings in England and Wales is about as clear as mud.  The wording in the current regulations is taken directly from the European Directive and says “buildings officially protected as part of a designated environment or because of their special architectural or historical merit, in so far as compliance with certain minimum energy performance requirements would unacceptably alter their character or appearance.”

When these regulations were enacted on 9th January 2013, it was generally accepted that listed buildings were exempt from the requirement for an EPC for sale or let although it was acknowledged that they would still require an EPC in other circumstances (e.g. Green Deal).  This belief was re-enforced by guidance published by Historic England which includes the statement “An Energy Performance Certificate (EPC) is a legal requirement when building, selling or renting a property. However, there are exemptions for certain types of building and since January 2013 listed buildings have been exempted from the need to have an EPC.”  However, Historic England’s Terms and Conditions include the usual disclaimers regarding their interpretation of the law in that the position stated was just their interpretation and that they accept no liability for its accuracy.  In the absence of enforcement action or legal precedents being set, much discussion has continued both in and out of the legal community with differing interpretations resulting.

Moving forward to the latest guidance to come from The Department of Business, Energy and Industrial Strategy, the UK Government Department which now has responsibility for EPCs.  Issued in February 2017, this update is contained within the guidance for landlords and enforcement authorities on the minimum level of energy efficiency required to let non-domestic property under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.  The advice, published in Chapter 1 on page 19 is shown below:

“There is a common misunderstanding relating to listed buildings and whether they are exempt from the requirement to obtain an EPC. Listed properties, and buildings within a conservation area, will not necessarily be exempt from the requirement to have a valid EPC and it will be up to the owner of a listed building to understand whether or not their property is required to have an EPC. Where a listed privately rented non-domestic property, or a property within a conservation area, is required to have an EPC, that property will be within scope of the minimum energy efficiency standards.

“As noted at 1.3.3 above, an EPC is not currently required for a listed property or building within a conservation area when it is sold or rented in so far as compliance with minimum energy performance requirements would unacceptably alter its character or appearance. Examples of energy performance measures which may alter character or appearance (or as a minimum are likely to require local authority planning permission to install on a listed building) include external solid wall insulation, replacement glazing, solar panels, or an external wall mounted air source heat pump. Where character or appearance would not be altered by compliance with energy performance requirements, an EPC may be legally required.

“If an owner or occupier of a listed building is unsure about whether their particular property is or is not required to have an EPC, appropriate advice should be sought at the earliest opportunity.”

Exactly the same information is contained within the equivalent publication for domestic properties which has been published more recently in October 2017.  Changes in other guidance documents issued by MHCLG (formerly DCLG) and BEIS have also been made to reflect this.  However, whilst they tend to reduce the previously special status given to listed buildings to a par with other designations including Conservation Areas, National Parks, Scheduled Monuments and protected parks and gardens, they do little to clarify exactly how far an exemption applies.

This guidance would seem to suggest that the UK Government believes the exemption for listed buildings is much more restricted than had previously become accepted.  Indeed, it would appear to be more compatible with the Scottish Government’s interpretation that the exemption is solely from making improvements that would unacceptably alter the protected building’s character or appearance and not from the entirety of the process.  Similarly, it would appear to reflect an expectation that reasonable improvements, particularly where these would improve the energy efficiency of a building whose performance is currently very poor, should be carried out.

This is not without merit or logic. At the current time, an EPC in itself does not mandate that any works actually be carried out. The recommendations are just that, recommendations. Therefore a view could be formed that having an EPC can never unacceptably alter the character or appearance of the building. As such it could be argued no building can claim exemption from having an EPC on these grounds alone. Additionally, the current requirements under the MEES include provision for exemptions from making specific improvements where required third party consent cannot be obtained. Hence, if Listed Building Consent cannot be obtained from the relevant authorities no unacceptable alteration to the character or appearance of the building is required and so again, there is no need to apply this exemption from having an EPC.

Many councils provide guidance on improving historic buildings with Westminster City Council providing some of the most extensive and practicable advice we have found. This includes a document titled “Energy Efficiency in Conservation Areas” which discusses improvements that can be made without damaging historic structures.

Whilst Historic England seem yet to update their specific guidance on this limited exemption, they do provide a wealth of information for those wishing to improve historic buildings without damaging their character and appearance.  Indeed, they acknowledge that ensuring a building remains useful and occupied is often the best way of protecting it for the future.  Additionally, some energy improvement measures can also improve fire safety and resilience in historic buildings.  It should be remembered that it was never the intent of the protection schemes to freeze buildings in time but instead to ensure that they are managed with appropriate sympathy and conserved for the future.

The background to this issue is also explored in a recent article by The Residential Landlords Association.  They make the following observation in relation to the exemption of Listed Buildings from EPCs:

“So in reality, in terms of an EPC, the caveat is meaningless. Therefore, a landlord cannot know if an EPC is needed before they have an EPC for the property”

This article continues to draw the following overall conclusion:

“Regrettably, we simply do not know the answer to whether or not an EPC is required for a listed building; nor whether landlords who have rented out listed buildings will have to comply with Minimum Energy Efficiency Standards (subject to any other available exemption, e.g. limiting the amount they have to spend); or whether you need an EPC for a listed building in order to be able to rely on regaining possession under Section 21 of the Housing Act 1988. What is clear is that if you have no EPC then you do not have to comply with Minimum Energy Efficiency Standards from 2018 onwards. You could be liable for a penalty for not having an EPC and equally you might not be able to get possession back relying on Section 21. This is a wholly unsatisfactory state of affairs which needs to be addressed by the Government.”

Interestingly, at a recent industry conference (Spring 2018), representatives of both MHCLG and BEIS confirmed that they believed Listed Buildings should have EPCs completed and that recommendations should be implemented wherever possible but with appropriate sympathy to the building as a whole.  They were unaware of the conflicting guidance from Historic England which they accepted may be the source of a lot of the current confusion and undertook to attempt to ensure that Historic England updated their guidance to more accurately reflect the limitations of any exemptions which may be available.

Unfortunately, as energy assessors, we are not in a position to provide legal advice but present this information to help you form your own opinion.  However, we would point out that there is currently nothing to stop an EPC being completed on a voluntary basis even when one is not required by law.  This may have its own implications and so building owners and occupiers should seek their own legal advice but voluntary compliance may provide a suitable solution.

Some listed buildings in England & Wales may be exempt from some or all of the Energy Performance Certificate (EPC) and Minimum Energy Efficiency Standards (MEES) requirements.  However, specific legal advice should be sought on a case by case basis.  It is unlikely that an exemption can be demonstrated without first having an EPC completed to confirm the recommendations proposed.

Buildings within formally designated conservation areas are less likely to be subject to exemptions.

What is a “Public Authority”? Is my charity/community group a public authority?

Unfortunately the current regulations in England & Wales provide no clear definition of the term “Public Authority”.  However, the regulations were intended to include central and local government, schools, colleges, academies, free schools, universities, hospitals, NHS funded centres and surgeries, libraries, publicly funded museums, emergency services, social services, publicly funded sports and leisure facilities and most other civic buildings.  As such, with the current format of service provision by charities, not-for-profits, community groups, agencies and arm’s length organisations, it is not correct just to assume the term is restricted to government departments and council facilities.

In the absence of a clear definition, it has become commonly accepted that the meaning of “public authority” in The Energy Performance of Buildings Directive (England & Wales) 2012 regulations is the same as the term “contracting authority” as defined in 2(1) of The Public Contracts Regulations 2015.  Additionally, a similar list of “public authorities” can be found in The Freedom of Information Act 2000.  This definition is further reflected in The Energy Savings Opportunity Scheme Regulations 2014 which ensures organisations are potentially subject to either mandatory Display Energy Certificates or Energy Savings Opportunities Scheme (ESOS) assessments but should not be simultaneously subject to both set of regulations.

The Public Contract Regulations 2015 state:

“contracting authorities” means the State, regional or local authorities, bodies governed by public law or associations formed by one or more such authorities or one or more such bodies governed by public law, and includes central government authorities, but does not include Her Majesty in her private capacity;

“bodies governed by public law” means bodies that have all of the following characteristics:—
(a)they are established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character;
(b)they have legal personality; and
(c)they have any of the following characteristics:—

(i)they are financed, for the most part, by the State, regional or local authorities, or by other bodies governed by public law;
(ii)they are subject to management supervision by those authorities or bodies; or
(iii)they have an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law;

Public Authority – Self Determination Questionnaire

If, as an organisation, you are unsure as to whether or not you are a “public authority” you should seek you own legal advice.  When considering if your not-for-profit or charity is subject to these regulations the key would normally be in deciding if you are a body “governed by public law”.  The following steps may help your trustees/directors to decide:

  1. Are you listed in Schedule 1 of The Public Contracts Regulations 2015 (click to view) or Schedule 1 of The Freedom of Information Act 2000 (click to view), a regional authority or a local authority (county, borough, district, town, parish councils etc.)?  If your organisation is one of these then you are a “public authority” and will require DECs on the premises you occupy if the floor area and public visitation requirements are also met.  If you are not listed you should continue to step 2 to see if you are subject to the regulations through the additional criteria.
  2. Do you have a legal personality for the purposes of the regulations?  In effect, are you a legal body other than an individual?  Typical examples could include limited companies (including charitable companies), limited liability partnerships (LLP), community interest companies (CIC), charitable incorporated organisations (CIO), co-operative societies (Co-op), community benefit societies (BenCom) and financial mutuals.  If your organisation is any of these you may be a “public authority” and should continue to step 3.  If not, you probably have no legal personality in this sense and so are not subject to mandatory DECs.
  3. Is your organisation established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character?  A traditional business exists to make wealth (money) for distribution to its owners, investors and shareholders.  In other words, it has industrial or commercial character and would not be considered a “public authority” hence you are not subject to mandatory DECs.  In contrast, public bodies in this sense exist to meet the general needs of society or of communities.  They often provide services like health, social care, education, child care and recreation etc on a not-for-profit basis.  They typically use any profits they make from business activities to reinvest in the provision of these services.  They may also have a legal “asset lock” preventing the distribution of any profits or assets to members or shareholders.  If you are a public body then you may be a “public authority” and should continue to step 4.
  4. Does the majority of your finance come from the State, regional or local authorities or other bodies governed by public law?  If the majority of your organisation’s funding comes from the government, regional authorities, local councils or other public bodies (likely to include grants from charities etc) then you are a “public authority” and will require DECs on the premises you occupy if the floor area and public visitation requirements are also met.  If not, continue to step 5.
  5. Are you subject to management supervision from the State (including central government departments), regional or local authorities or other bodies governed by public law?  A simple way of determining this is to consider if you are free to run your organisation as you wish or whether you have to account for decisions that are made or actions taken to another organisation.  For example, most organisations receiving public money have to report upon the activities funded directly or indirectly back to the funding organisation, i.e. they are subject to supervision to ensure the money is spent as intended.  Registered Charities are subject to the supervision of the Charity Commission which is part of the State.  Similarly NHS practices are subject to supervision from the Department of Health through NHS Trusts and schools, colleges and academies are subject to supervision by the Department of Education through OfSTED.  If you are subject to management supervision then you are a “public authority” and will require DECs on the premises you occupy if the floor area and public visitation requirements are also met.  If not, continue to step 6.  [NB: Educational establishments should remember that students are considered to be members of the public under these regulations.]
  6. Do you have an administrative, managerial or supervisory board with more than half its members appointed by the State (including central government departments), regional or local authorities or other bodies governed by public law?  If your organisation does then it is a “public authority” and will require DECs on the premises it occupies if the floor area and public visitation requirements are also met.  If not, you are probably not a “public authority” and so will not require mandatory DECs on the premises you occupy.  However, “public authorities” are exempted from ESOS and so you may be subject to the requirements of the Energy Savings Opportunities Scheme.
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