Draft Energy Efficiency (Domestic Private Rented Property) (Scotland) Regulations: consultation

4. Proposals

4.1 The minimum standard

The withdrawn 2020 regulations took a phased approach that would ultimately have required domestic PRS properties to meet EPC band D. The Scottish Government has now established a good level of energy efficiency as being equivalent to the current EPC band C^[28].

In the recent HiBs Bill consultation, we consulted on a MEES being equivalent to the current EPC band C, and that this standard could be met by reaching EPC band C or by installing a list of measures^[29]. We intend to now exclude the option to meet the standard by installing a list of measures. One of the reasons for this previous approach was to support owner occupiers who may not have had a recent or valid EPC for their property and it would relieve some of the administrative burden. Landlords are already required to have a valid EPC before letting a property, and would not benefit from this aspect of the process being removed, particularly where they let a property to a new tenant from 2028. Excluding the list of measures approach also ensures that properties across the PRS are aiming to meet the same standard, ensuring fairness for tenants across Scotland who are not responsible for making upgrades and therefore cannot go beyond the list of measures if they want to have a warmer home. Additionally, this ensures that there is less confusion for landlords and tenants on what is required by the standard. In the PRS, we believe it is important that the minimum standard is the same across the sector.

Later this year we will introduce regulations to reform EPCs, with new EPCs going live in 2026. This will mean that from Autumn 2026 the ratings that will appear on an EPC will differ to those currently shown. Current domestic EPCs have a headline rating that is based on the cost to run the home, alongside a rating that is based on carbon emissions intensity. The new EPCs will provide three headline ratings:

1. Heat Retention Rating (HRR) – this will demonstrate the performance of the buildings fabric (i.e. how well the building retains heat due to insulation and other factors);

2. Energy Cost Rating (ECR) – which will be similar to the current ‘Energy Efficiency Rating’ displayed on existing EPCs. This will be based on the annual costs of running the building to standard conditions, normalised to floor area, and how these costs could change as a result of the potential improvement options; and,

3. Heating System Rating (HSR) – which will show whether the installed heating system is polluting, hybrid or clean, and its emissions and efficiency.

In line with the longstanding approach to EPC ratings, these ratings will be calculated using standard assumptions about the building’s occupancy, location, and climate. This means that they reflect the performance of the building itself, not where it is located or how people use it.

In the Scottish Government response to the EPC Reform consultation^[30], we set out that band C in the HRR will be broadly in line with the fabric performance of homes in band C of the current cost-based rating. This means that homes that achieve this standard meet a good level of energy efficiency, equivalent to current Energy Efficiency Rating band C. Our response to the EPC Reform consultation sets out that band C will be achieved by homes with a HRR between 71 – 120 kWh/m2/year^[31].A home which achieves band C will therefore use less energy, per year, to maintain a comfortable temperature than an equivalent home achieving band F^[32]. To reduce the amount of energy required to maintain a comfortable temperature would most likely be achieved through improving fabric, for example the insulation of the walls, roof, windows, doors and floors, and reducing draughts.

EPC Bands	Heat Retention Rating kWh/m2/year	Basis
A	30 or less	High level of energy efficiency
B	31 to 70	High level of energy efficiency
C	71 to 120	Good level of energy efficiency
D	121 to 215	Lower level of energy efficiency
E	215 to 301	Lower level of energy efficiency
F	302 to 350	Lower level of energy efficiency
G	351 or more	Lower level of energy efficiency

We propose that the PRS MEES will be measured against the HRR on reformed EPCs, and that the standard to be met will be EPC HRR band C, which is a good level of energy efficiency. This means that landlords would be prohibited from letting a property unless it meets the new EPC HRR band C, has all relevant energy efficiency measures^[33] installed, or is exempt.

We have proposed to use the HRR as a basis for PRS MEES because it is the only one that can reduce energy demand, and therefore achieves the dual aim of reducing emissions while also supporting removal of poor energy efficiency as a driver of fuel poverty.

We understand that the Energy Cost Rating gives an indication of the cost to heat the property and that improvements to this could also benefit those in fuel poverty, however it is not able to guarantee that properties are brought up to a good fabric standard that ensures comfort and health benefits, regardless of the type of heating system used. Ensuring good fabric energy efficiency future-proofs homes against changes to fuel prices by reducing demand, and prepares properties for future changes to clean heating systems. Using the HRR provides certainty for landlords and tenants in the long term as, unlike the cost rating, it is not influenced by fuel costs. It is possible that with the cost rating that if gas and electricity prices are rebalanced, then the rating of an individual property could change (for example, it now costs more to run a gas boiler, meaning a property with one moves down a rating).

This does not mean that the type of heating system installed in a PRS property is not important, and landlords should continue to consider installing the most efficient and cheapest option available for their property to benefit tenants’ bills. The new EPC Heating System Rating will give information that will help landlords and tenants understand the likely installation and running costs of different heating systems. The best solution for heating will change over time as clean heating system provisions develop, not least through the HiBs Bill and as the UKG take action to rebalance gas and electricity prices.

Consultation Question

• 1. Do you agree that the PRS MEES should be EPC HRR band C?

4.2 Demonstrating compliance with existing or reformed EPCs

Present data shows that there are around 144,000 PRS properties below EPC band C (48% of total PRS properties)^[34] based on the current EPC cost-based metric. Although we expect that the performance of dwellings in the HRR will be, on the whole, broadly similar to their performance in the existing rating, there will be instances where some homes that currently achieve EPC band C fall below C in the new HRR. Similarly, some homes that are currently below EPC band C will achieve C or above in the HRR.

As set out above, our response to the EPC Reform consultation detailed that band C in the HRR would be achieved by dwellings with a rating between 71 and 120 kWh/m2/year. Modelling conducted by BRE in 2023 found that around 80% of dwellings that meet EPC band C in the current cost-based Energy Efficiency Rating achieved performance within band C of the new HRR. We are undertaking further research to understand the HRR performance of dwellings when assessed under the Home Energy Model and intend to publish results later this year, when the new EPC regulations are introduced to Parliament.

This means that some homes that the landlord may have thought would already meet the standard may not. Buildings using an inexpensive heating fuel but with leaky building fabric will see that reflected in a poorer rating under the HRR. Similarly, buildings using an expensive fuel, such as electricity, but with good insulation will perform better in the HRR.

A common question throughout our engagement with stakeholders has been whether existing EPC ratings will be valid to evidence compliance with the PRS MEES. We have considered these concerns and explored options for ‘grandparenting’ current EPCs following reform which would allow for EPC certificates which were issued using the existing cost-based rating to be used for evidencing compliance with the new PRS MEES.

Following our assessment, we propose that landlords will be required to meet new EPC HRR band C only, and that a property with an existing EPC band C will not be deemed compliant.

We believe that this approach will ensure that the fabric upgrades that need to be made in the PRS are prioritised. It will ensure that properties are brought up to a good standard of energy efficiency that future proofs against changes in fuel prices by actually reducing energy demand.

It will ensure that different properties, potentially in the same building, are not able to meet the standard in different ways – i.e. using the old and new EPC system. This will reduce the risk of confusion when a tenant comes to rent a property as there will only be one way to comply with the standard – and therefore knowledge would only be required of the new EPC system, rather than of both.

We believe that this approach enables simpler monitoring and compliance, which is important for landlords and local authorities. They must be able to easily understand what they must do to comply with the standard.

This approach will also allow us to more directly tackle removing poor energy efficiency as a driver of fuel poverty. The HRR will directly reflect the fabric energy efficiency of the building and how well its walls, roof, floor, and windows retain heat. This means that measures which are installed to improve the HRR will directly reduce the amount of heat which is lost and reduce the amount of energy required to maintain a comfortable temperature. Landlords and tenants will also continue to be able to understand the energy costs associated with heating the home, both before and after improvements are made, through the renamed Energy Cost Rating. This will ensure that our fuel poverty objectives are supported through the MEES directly targeting poor energy efficiency by measurement of the HRR, whilst at the same time continuing to understand the impact on the cost of energy through the Energy Cost Rating.

Consultation Question

• 2. Do you agree that only new reformed EPCs should be used as a basis for the proposed MEES?

4.3 Backstop date: 2033

A backstop date is the deadline for all properties within that tenure to meet the standard. In our most recent consultation for a proposed HiBs Bill, we proposed a variety of backstop dates across different tenures.

We consulted on a backstop date of 2028 for the energy efficiency standards in domestic PRS properties, meaning all domestic PRS properties would have been expected to meet the standard, unless exempt, by that date. The majority of responses received to the HiBs Bill consultation supported the proposal for domestic PRS properties to meet the standard by the end of 2028 (58% of responses). A common theme within those responses was the positive impact it could have on tenants, who are often unable to carry out the energy efficiency works that could decrease their energy bills. This was also seen to align with wider Scottish Government commitments to eradicate poor energy efficiency as a driver of fuel poverty and its interim target for no more than 15% of fuel-poor households by 2030. An estimated 44% of PRS households were in fuel poverty in 2023 and it was generally thought that improvements for tenants should be prioritised.

Of the responses that opposed the proposed 2028 backstop date, many were concerned that the timescales would not be sufficient to allow landlords to comply. There were concerns that the supply chain and workforce capacity would be a potential barrier to implementation, as well as landlords' ability to plan for the cost of the transition.

Since the earlier HiBs Bill consultation, there has also been the introduction of the Housing (Scotland) Bill to the Scottish Parliament, which is currently at Stage 2 of the parliamentary process. The Bill contains a package of reforms which will help ensure people have a safe, secure, and affordable place to live. This includes plans for long-term rent controls. This would apply a cap to rent increases both during and between tenancies in areas where rent controls were in place. During engagement on the Housing Bill, landlords have reported their concerns that previous emergency legislation, the measures set out in the Bill alongside other regulatory change could have a cumulative impact on their ability to continue to offer homes for rent. The Scottish Government is currently consulting on how the powers within the Bill to exempt certain properties from rent control or to allow landlords to increase rent above the level of cap could be used, and this includes specific consideration of where landlords make energy efficiency improvements to their property. We will take this into account when finalising our PRS MEES^[35]. It is important for Scottish Government to continue to consider the potential impacts on landlords and ensure the combined introduction of legislation remains fair and proportionate.

We have considered this, as well as the feedback received through the HiBs Bill consultation. We acknowledge the need to provide sufficient time for the sector to adapt and take necessary action to comply with the regulations. Therefore, we propose that the PRS MEES will apply to a ll tenancies, unless exempt, by the end of 2033.

This means that by the end of 2033, the MEES will apply to all domestic private rented properties, even if there has been no change in tenancy.

Consultation Question

• 3. Do you agree that the backstop date for all PRS homes to comply with MEES should be 2033?

4.4 In force date and earlier phased action: 2028

Although sufficient time is required to ensure these regulations are achievable, early action from landlords will also be crucial. This is to enable a phased approach to the works that will be required, supporting the gradual development of supply chains and avoid potential last-minute bottlenecks ahead of the proposed backstop date.

For this reason, we propose that the PRS MEES will apply to new tenancies from 2028, unless exempt. This will mean that from 2028 before any domestic PRS property can be let to a new tenant the landlord must have carried out the required energy efficiency improvements which apply to the property, unless exempt, to meet EPC HRR band C.

Consultation Question

• 4. Do you agree that the MEES should apply to properties being let to new tenants from 2028?

4.5 Tenancies in scope

It is our intention that these regulations will take a similar approach to those drafted in 2020 and will apply to tenancies that are covered by the Repairing Standard^[36]. This means that when laid, PRS MEES regulations will apply to “any tenancy of a house let for human habitation”, except where the tenancy^[37]:

• applies to an occupancy arrangement e.g. when a landlord shares their home with someone;
• is for a dwelling that is not a house, which means that mobile homes and other dwellings which are not part of a building are excluded from these standards – however, the definition of a house does include gardens and garages;
• is for a property that does not apply to tenancies that are specifically excluded by section 12 of the Housing (Scotland) Act 2006, which means that social housing is excluded from these standards.

4.6 Changes to the repairing standard: crofters, small landholders and agricultural holdings

From 28 March 2027 the types of tenancy that are excluded from the Repairing Standard will change, and it will be extended to apply to^[38]:

• the Crofters (Scotland) Act 1993
• the Small Landholders (Scotland) Acts 1886 to 1931, and
• the Agricultural Holdings (Scotland) Act 2003, including:
• 1991 Act tenancies
• short limited duration tenancies
• limited duration tenancies
• modern limited duration tenancies
• repairing tenancies.

We are proposing that the properties listed above, are excluded from the PRS MEES requirements even once they become part of the repairing standard. This is because the PRS MEES regulations will introduce a prohibition on the letting of a property where the standard is not met, and meeting this standard would not be appropriate for the nature of many of these tenancy agreements, which can be lifelong, intergenerational or legally required.

Consultation Question

• 5. Do you agree that, regardless of changes to the repairing standard, that crofters, small landholders and agricultural holdings should be excluded from PRS MEES?

4.7 Short-term holiday lets

The repairing standard does apply to short-term holiday lets, meaning they would ordinarily be included in our PRS MEES proposals. However, it is our intention to exclude these properties from our regulations. They do not have the same interaction with fuel poverty as properties in the PRS. This is because those staying in short-term holiday lets typically do not pay energy bills, and therefore do not receive the same benefits of energy efficiency improvements as PRS tenants. It is the owner who would benefit from making the upgrades.

That said, we recognise the benefits of improving energy efficiency across all buildings in Scotland and the role that can play in reducing emissions, particularly those caused by existing polluting heating systems. Our proposals to introduce a HiBs Bill later this year will include powers for Scottish Minsters to set MEES across wider sectors in future should the choose to. Any future development of MEES could consider the potential for standards to be applied to short-term holiday lets.

Consultation Question

• 6. Do you agree that the regulations should exclude short-term holiday lets from the PRS MEES?

4.8 Exemptions

We have been clear throughout previous consultations that our approach to regulate MEES will need to provide flexibility and exemptions where those are needed. This is to ensure regulations are fair, affordable and achievable. No landlords will be required to install measures which are technically unsuitable for the type of property they own, for which they cannot attain the required consent from tenants, neighbours or planning authorities, or which would be prohibitively expensive.

As set out above, a property which does not meet the MEES may only be let if the landlord has made all suitable relevant energy efficiency improvements. It may be the case for some properties that do not meet the standard that only a limited number of improvements (whether or not they are relevant energy efficiency improvements) are required to bring the property up to the MEES.

However, we acknowledge that further flexibility is required to ensure that landlords are not required to install any measures which are not suitable or feasible. The most recent consultation on proposals for a HiBs Bill sought views on this, with an overwhelming majority of respondents supporting the principle of flexibility. A key theme from stakeholders who attended consultation events focussed on the limited energy efficiency measures available to certain types of homes, particularly tenements and traditional buildings, which represent a high proportion of the domestic PRS^[39]. Nearly two-thirds of PRS properties are tenements or flats, and more than one-third of PRS properties were built before 1919.

To ensure that these regulations provide the necessary support and accommodate individual circumstances, we will make exemptions available to landlords. Our approach follows proposals made in the draft 2020 regulations and will cover consent, negative impacts on the fabric or structure of a property, temporary exemptions and a cost cap.

4.9 Consent

This will exempt landlords from having to make relevant energy efficiency improvements before letting a property where:

• The current tenant refused consent for improvements to be made;
• Necessary third-party consents^[40] were refused, or were granted but under conditions with which the landlord could not reasonable comply;
• Necessary third-party consents could not be obtained despite reasonable efforts having been made by the landlord.

We believe this will provide sufficient protection to ensure that landlords will not be penalised for failure to obtain required third party consent (whether that is from the current tenant, other occupiers of the building, or permissions and consent required for undertaking work to the building).

We propose that this exemption should last for five years to ensure that any changes to planning regulations and/or the will of other residents or owners of a building are reflected in the future. If in the case of an exemption relating to tenant consent, this would expire upon end of tenancy (or the tenancy being assigned to a new tenant) or after five years – whichever occurs first.

4.10 Negative impacts on fabric or structure of property

This will exempt properties from installing relevant measures for which the landlord has received written opinion from a relevant person advising that doing so would be inappropriate or could have negative impacts on the fabric or structure of the property or the building of which the property is part. Professionals constituting a “relevant person” would be defined (as they were in the 2020 draft regulations) as being an independent architect, independent chartered engineer, independent charted building surveyor, or independent chartered architectural technologist.

This exemption serves to prevent the unsuitable application of certain improvements based on individual property circumstances without explicitly excluding them for all buildings. For example, this could include situations where certain types of cavity wall insulation are not suitable in areas with high driving rain, or in properties where internal or external wall insulation should not be installed due to risk of dampness, or to prevent risk of condensation. It would also ensure that where buildings are designated, such as in a conservation area, that measures would not be installed which would contravene requirements of the designation.

We propose that this exemption should last for five years to ensure that any changes to available technologies or development of new energy efficiency measures are reflected in regulations. In the years to come changes in technology may allow measures to be installed which currently are not suitable for some properties. As a result, it is important to revisit the need for this exemption periodically to ensure properties are meeting their full potential.

4.11 Heat and Energy Efficiency Technical Suitability Assessment

The Scottish Government is, in parallel to this consultation on the PRS MEES, consulting on the scope of a potential Heat and Energy Efficiency Technical Suitability Assessment (HEETSA). This bespoke technical assessment would be a step beyond the standardised, modelled EPC assessment and could be used to support building owners in understanding which potential energy efficiency improvement measures would be technically suitable (and which would not).

The Scottish Government has listened to stakeholder feedback which expressed concern at potential risks of things like dampness, condensation or mould if energy efficiency measures were recommended which would not be appropriate for a building. This proposed technical suitability assessment would provide an additional level of safeguard for consumers, particularly those in more complex to decarbonise buildings such as traditional or protected buildings, those in rural areas, or tenements.

4.12 Temporary exemptions

Temporary exemptions will address specific circumstances that may arise, allowing a property to be exempt from the prohibition of letting a sub-standard property for a temporary period. This would be, for example, in circumstances where there are changes to the landlord of the property or changes to the circumstances which exist between the landlord and tenant. This could include situations where a landlord inherits or purchases a property with a sitting tenant to ensure they would not be penalised and would be given sufficient time to comply with the regulations.

We intend for this exemption to last six months from the date at which the new landlord inherits or purchases the property. We believe this provides a fair period of time for the new owner to either upgrade or sell the property.

4.13 Cost cap

Similarly to the approach taken in the draft 2020 regulations, we are proposing to introduce a cost cap exemption. This exemption would provide a “ceiling” on the maximum investment that a landlord would be required to invest in a single property through making energy efficiency improvements with the aim of reaching the minimum standard.

This would mean that if a landlord is unable to improve their property to the minimum standard (EPC HRR band C) without spending more than the cost cap, they would not be required to do so. Instead, the landlord would be required to make all the relevant improvements which can be made up to the amount of the cap, then register for an exemption.

Our analysis has shown that the average cost of energy efficiency improvements that may be required for domestic PRS properties, based on current EPC metrics, could be around £1,400 - £2,700, based on the list of measures used. Our analysis has been based on a short list of energy efficiency improvements that we assume could be some of the most commonly adopted by landlords with an aim of meeting the MEES^[41].

We know that there will be variation in the total cost to individual landlords in making energy efficiency improvements with some required to spend much less and some much more to reach the standard. This is due to the variation in the current level of energy efficiency of properties as well as the combination of energy efficiency improvement measures that could be installed in order to reach the minimum standard. In some instances, we expect that landlords will be able to reach the minimum standard through installing one or two lower cost improvements such as draught proofing (average estimated cost £30) or through topping up existing loft insulation (average cost of £870).

We are commissioning further analysis to understand how different homes perform in the current cost-based rating and the new HRR. This analysis will be used to inform our policy development and the finalisation of a suitable cost cap for these regulations.

We know that we must take a balanced approach to setting the level of a cost cap. A cost cap must provide an appropriate level of financial protection to landlords while also maintaining the effectiveness of the regulations. If a cost cap is set too low, it could result in a high percentage of PRS properties qualifying for the exemption before reaching the minimum standard. It may also restrict some of the more costly but effective energy efficiency improvement measures from being installed.

To support the final development of the cost cap exemption, we are seeking views on a proposed cost cap of £10,000. This is consistent with the level of cost cap proposed for the Draft 2020 regulations, which provided a cumulative cost cap of £10,000.

We propose that the cost cap exemption would remain in place until the property next changes ownership to a new landlord. This strikes a fair balance between ensuring the current landlord is not asked to spend additional funds in future upgrading the property after meeting the cap with requiring any new owner to invest in improvements if the property has not yet reached EPC HRR band C.

We recognise that landlords may seek to implement improvements earlier than the enforcement dates and are keen to ensure that these costs are captured in their efforts to achieve the minimum standard. For this reason, we propose that expenditure made on energy efficiency improvements which are intended to meet the standard are countable towards the cumulative cost cap within a period of 12 months in advance of the Regulations coming into force.

As was the case with the 2020 regulations, we intend for all ‘actual costs’ to be included towards reaching the cost cap. There may be instances where a landlord is required to comply with these regulations before their existing EPC has expired. This will result in them having to commission a new EPC assessment. To accommodate the additional expense of carrying out a new EPC assessment we propose that the cost of obtaining a new EPC are within scope of the cost cap exemption and can contribute to the cumulative costs to reaching the minimum standard.

Consultation Questions

• 7. Do you agree with the proposed exemptions covering consent, the fabric requirements of the home and temporary exemptions?
• 8. Do you agree that HEETSA should be available as an option to evidence potential negative impacts on the fabric of a property and to support an exemption?
• 9. Do you agree that the cost cap level should be £10,000?
• 10. Do you agree with the proposed 12 month lead in time period for works to contribute to the total cost cap?
• 11. Do you agree that that all actual costs, and the cost of an EPC, should count towards the cost cap?

4.14 Support

We understand it is important that landlords can access support to make the required upgrades to their properties. While most landlords are small businesses with an income generated from renting a property, it does not necessarily mean that they have sufficient savings or working capital to make the required energy efficiency improvements to their properties to continue being able to let them. We want to avoid any instances where landlords are compelled to sell their properties, or change their use from offering secure tenancies, because they are unable to undertake works to meet the PRS MEES.

The Scottish Government established the PRS Landlord Loan Scheme^[42] in 2020 to support the now withdrawn regulations. It provides financial support through loans. Landlords with up to 5 properties in their portfolio can borrow a maximum of £100,000 and will not be subject to interest. Applicants with more than 5 properties in their portfolio can borrow a maximum of £250,000 and will be subject to interest at a rate of 3.5% APR.

Since going live in 2020, over £1.5 million in support has been provided to make energy efficiency improvements and install clean heating systems. The PRS Landlord Loan Scheme is still available for private sector landlords to access. We are now seeking views on the appropriateness of the support provided in supporting the proposed regulations.

Consultation Questions

• 12. Do you agree that landlords should receive Scottish Government support to make the required changes?
• 13. Do you agree that this should be in the form of a loan?

4.15 Monitoring and enforcement

We propose that these regulations have similar monitoring and enforcement provisions to those in the draft 2020 regulations. This involves understanding which properties comply and issuing penalty notices to landlords whose properties are non-compliant.

We propose to designate local authorities as the enforcement bodies. This will allow for a local approach to be taken when carrying out monitoring and enforcement activities and could allow for alignment with existing schemes, such as the Area Based Schemes, that are already being delivered by every council in Scotland. These schemes provide a means and resources to engage with some private landlords, delivering improvements to mixed tenure blocks that would otherwise require an exemption (on technical or cost grounds).

Local authorities are also enforcement authorities for the EPC regulations and have access to the EPC Register as part of their functions. They likewise have access to a list of PRS properties for their area. This will allow them to monitor performance of PRS properties against the MEES by checking a property’s HRR on the EPC Register when new certificates are lodged.

It would be for each local authority to take a targeted approach to enforcement of these regulations which would reflect local needs and drivers. We envisage that the evidence local authorities gather through their monitoring and enforcement duties will shape future developments in our policies and identifying any barriers.

Consultation Question

• 14. Do you agree that local authorities should be responsible for monitoring and compliance of these regulations? If no, please provide details of an alternative with your reason(s) as to how this would support the delivery of these regulations.

4.16 Penalties

The Energy Act 2011 provides powers to impose sanctions on landlords for non-compliance with the regulations. This can include financial penalties up to a maximum of £5,000 in the event of a single act of non-compliance. However, the Regulations can break down this total to best fit with our intentions to achieve compliance and improvement under the Regulations.

In 2020, the proposed level of financial penalty for acts of non-compliance were developed through multiple consultations and through extensive stakeholder engagement. These were deemed appropriate to ensure compliance with the standards. As such, we propose that we adopt a similar level of financial penalties for acts of non-compliance, adjusting them slightly to account for inflation.

We propose:

• Where a landlord breaches the regulations and, at the time the penalty notice is served has, or had, been in breach for less than six months, the financial penalty imposed is £600.
• Where a landlord breaches the regulations and, at the time the penalty notice is served has, or had, been in breach for six months or more, the financial penalty imposed is £3,000.
• Where a landlord has submitted false or misleading information for registration under the regulations, the financial penalty imposed is £600.
• Where a landlord has failed to comply with a compliance notice in breach of the regulations, the financial penalty imposed is a sum not exceeding £600.

Consultation Question

• 15. Do you agree with the proposed level of financial penalties to support compliance with the regulations? If no, please provide detail on suggested amendments that should be made, outlining how the changes would increase the impact of penalties to achieving compliance with the Regulations.

4.17 Amendment to primary legislation: Energy Act 2011

Chapter 3 of the Energy Act 2011^[43] (the Energy Act) provides the powers for Scottish Ministers to introduce energy efficiency regulations for domestic PRS properties. The Energy Act also provides the same powers to the Secretary of State to introduce energy efficiency regulations within England and Wales.

As part of the UKG’s recent consultation on increasing the PRS MEES to “meeting a standard set against the fabric performance metric, which is likely to require similar improvement measures as meeting an EPC band C on current EPCs”, the UKG also sought views on proposals to amend the primary powers within the Energy Act. Specifically, they asked stakeholders about their intention to increase the maximum financial penalty that could be imposed for non-compliance from £5,000 to £30,000.

The proposals for financial penalties in instances of non-compliance are set within the Energy Act 2011, which are a maximum of £5,000. The proposed fine levels for these regulations are developed under the current limitations of the Energy Act. It is not the intention for Scottish Ministers to introduce fines for these regulations which go above the current limit (£5,000), however, to ensure that there is consistency within the Energy Act, and the powers afforded to Scottish and UK Ministers, we are seeking views on proposals to align with UKG and amend the primary legislation.

This would provide Scottish Ministers with the powers to amend secondary legislation in the future should a need to do so arise. If this current proposals for change is implemented by the UKG, this would increase the maximum financial penalty that could be introduced through regulation to £30,000.

Consultation Question

• 16. Do you agree that the Scottish Government should seek to amend the Energy Act 2011 to increase in maximum financial penalties that could be imposed up to £30,000 in future, should this be deemed necessary?

4.18 Impact assessments

The Scottish Government is required to consider the impacts of proposed policies, plans or strategic decisions in relation to equalities, various societal groups and sectors, data protection and the environment, under a range of legislation and commitments.

This was the case in 2020 and we developed a suite of impact assessment to accompany those regulations. This included an Equalities Impact Assessment (EQIA); Islands Community Impact Assessment (ICIA); Business Regulatory Impact Assessment (BRIA); Child Rights and Welfare Impact Assessment (CRWIA); and, a Fairer Scotland impact assessment.

Time has passed since the above impact assessments where developed which may result in some of the details within being outdated. For this reason, we propose to refresh the suite of impact assessments to support the delivery of these regulations. In addition to those previously carried out, we are also assessing the need for a Strategic Environmental Assessment (SEA), a Data Protection Impact Assessment, and a Consumer Duty Impact Assessment.

This consultation and the engagement planned throughout will support the finalisation of these impact assessment which will be published in support of the laying of the regulations in Scottish Parliament.

A Partial Business and Regulatory Impact Assessment (BRIA) has been prepared and published alongside this consultation. As referenced above, we intent to publish a Final BRIA to support the laying of the regulations in Scottish Parliament.

Consultation Question

• 17. In what way could these regulations have a specific or different impact, positive or negative, on a particular group of people? This could be based on protected characteristics, such as age or disability, or geography, such as island communities.