Upgrading energy efficiency under the Renters’ Rights Act poses new challenges

The introduction of the Renters’ Rights Act has created new obstacles for landlords aiming to improve the energy efficiency of their properties. The National Residential Landlords Association (NRLA) has highlighted concerns over how these legal changes might complicate compliance with upcoming energy performance requirements.

Challenges posed by the Renters’ Rights Act

Previously, landlords could wait for a tenancy to end or use Section 21 notices to create a void period during which they could undertake energy efficiency improvements. However, the Renters’ Rights Act has abolished Section 21, removing this straightforward option.

With the government’s commitment that all private rented properties must achieve an Energy Performance Certificate (EPC) rating of C by 2030, landlords now face uncertainty over how to retrofit properties when tenants are not required to vacate during works.

Restrictive criteria for possession

The NRLA points out that the only viable legal route to gain possession for retrofit works is under Ground 6. This ground applies when a landlord intends to demolish or significantly redevelop a property, and the work cannot be carried out with the tenant in situ.

However, the threshold for what constitutes “substantial” redevelopment is high, typically involving major structural changes that render the property uninhabitable. Most energy efficiency upgrades, even costly ones, are unlikely to meet this stringent requirement.

Additional conditions apply: the landlord must have owned the property before the tenancy began, and the tenancy must have lasted at least six months. These restrictions further limit landlords’ ability to use this ground for possession.

Temporary exemptions under MEES

Where tenant cooperation is necessary, landlords may apply for a third-party consent exemption under the Minimum Energy Efficiency Standards (MEES). This exemption protects landlords from enforcement action if they can demonstrate genuine attempts to obtain tenant consent for improvements.

Nonetheless, this exemption is only temporary. It lasts for five years or until the tenancy ends, whichever occurs first, and merely delays the obligation to meet EPC C standards rather than removing it.

Once the tenant vacates, the exemption ceases to apply, and landlords must complete the required energy efficiency upgrades.

What this means for landlords

The abolition of Section 21 under the Renters’ Rights Act significantly reduces landlords’ flexibility to carry out energy efficiency improvements without tenant cooperation. The restrictive nature of Ground 6 possession means that most retrofit works cannot be scheduled by forcing tenants to leave.

Landlords must therefore rely heavily on tenant cooperation or temporary exemptions, both of which present challenges in meeting the government’s 2030 EPC C target. This situation may lead to delays in upgrading properties and increased complexity in managing compliance.

Source: Based on reporting from Property118

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