2 How the Regulations Apply to the Private Rented Sector
2.1 Properties covered by the Regulations
2.1.1 Properties in the PRS, where there is an EPC, and the tenancy is covered by the repairing standard as defined in the Housing (Scotland) Act 2006 section 12, are covered by these Regulations.
2.1.2 A domestic private rented property is considered to be ‘sub-standard’ in terms of the Regulation where the valid EPC expresses the energy performance indicator of the property as being below the minimum level of energy efficiency’. (Regulations 6(a)).
2.1.3 Regulation 6 (b) sets out that the minimum level of energy efficiency means:
a) a property meets an EPC rating of E, where there has been a change of tenancy, from 1 April 2020 (the date of commencement of the regulations);
b) a property meets an EPC rating of E by 31 March 2022;
c) a property meets an EPC rating of D, where there has been a change in tenancy from 1 April 2022;
d) a property meets an EPC rating of D by 31 March 2025.
2.1.4 Regulation 7 prevents a landlord from letting or continuing to let a property that does not meet minimum standards unless an exemption applies. (See Section 4).
2.2 Energy Performance Certificate (EPC) ratings
2.2.1 As noted above, alongside tenancy type considerations, the Regulations only apply to those private rented properties where there is an EPC. Building owners are legally required to provide an EPC on construction, sale or rental of a building to a new tenant.
2.2.2 EPCs include a Recommendations Report which gives more detailed information on the energy efficiency of the building, how to improve it and the possible costs. Landlords can use the EPC Recommendations Report to find out what type of work they can do to improve the energy efficiency of their property to meet minimum energy efficiency standards. Home Energy Scotland (HES) can give advice on improvements and finance.
2.2.3 Further advice on Energy Performance certificates can be found at https://www.gov.scot/publications/energy-performance-certificates-introduction/
2.3 When do the minimum level of energy efficiency provisions apply?
2.3.1 Minimum standards for energy efficiency in the PRS are being introduced in a phased manner, initially with triggers for new tenancies entered into from 1st April 2020 onwards, and a “backstop” date of 31st March 2022 for all remaining tenancies.
|Date||EPC Standard||Properties in scope|
|From 1 April 2020||EPC E||Change in tenancy|
|By 31 March 2022||EPC E||All tenancies|
|From 1 April 2022||EPC D||Change in tenancy|
|By 31 March 2025||EPC D||All tenancies|
2.3.2 From 1st April 2020, where a landlord intends to let a domestic private rented property on a new tenancy (or after 31st March 2022 continue to let such a property) they need to check whether their property is covered by the minimum level of energy efficiency provisions, and, if so, ensure that the EPC rating is at E or above. If the EPC rating is below E, the landlord must either take appropriate steps to improve the rating to meet the minimum standard, as set out in the EPC Recommendations Report, or register an exemption, if one applies (see chapter 4).
2.3.3 The next phase of minimum standards for energy efficiency in the PRS comes into effect on 31st March 2022 when all tenancies are covered by the Regulations. At this point all PRS properties should have reached EPC standard E, and a landlord must not let any EPC F or G rated domestic property to new tenants, or renew or extend an existing tenancy agreement with existing tenants, unless either:
- the landlord has made all the relevant energy efficiency improvements that can be made (or there are none that can be made) and the property’s energy performance indicator is still below an EPC E, and this has been registered as an exemption on the PRS Exemptions Register; or
- no improvements have been made but a valid exemption applies which has been registered on the PRS Exemptions Register.
2.3.4 Then from 1st April 2022, where a landlord intends to let a domestic property on a new tenancy (or after 31 March 2025 continue to let such a property) they need to check whether their property is covered by the minimum level of energy efficiency provisions and, if so, ensure that the EPC rating is at D or above. If the EPC rating is below D, the landlord must either take appropriate steps to improve the rating to meet the minimum standard, as set out in the EPC Recommendations Report, or register an exemption, if one applies (see chapter 4).
2.3.5 Then, after 31st March 2025, when all tenancies are covered by the Regulations, landlords must not continue to let a sub-standard domestic property, even to existing tenants (where there has been no tenancy renewal, extension or indeed new tenancy), unless:
- all relevant energy efficiency improvements have been made (or there are none that can be made), the EPC remains below D, and the situation has been registered on the PRS Exemptions Register; or
- no improvements have been made but a valid exemption applies and has been registered on the PRS Exemptions Register.
2.3.6 If the landlord continues to let a property that does not comply with minimum standards they may be subject to a civil penalty. Details of civil penalties can be found at para 5.3.
2.4 Subletting properties
2.4.1 If a property is sublet, the property owner is normally responsible for ensuring the property complies with minimum standards.
2.5 Houses in Multiple occupation (HMOs) and shared rentals
2.5.1 A landlord advertising a property to let in Scotland is required by law to provide an EPC for that property and must display the EPC rating in the advert. This applies to HMOs as well. Given that this is an existing legal requirement, HMOs must therefore comply with the minimum standards set out in these Regulations.
2.5.2 Also, if such a dwelling (whole building) is being let or sold as a whole (not just when individual rooms become available) an EPC is required to meet the Energy Performance Buildings Directive (EPBD) and is therefore covered by these Regulations.
2.5.3 Further guidance on the need for an EPC, including frequently asked questions about HMOs, can be found at https://www.gov.scot/publications/energy-performance-certificates-frequently-asked-questions/ . If in doubt, legal advice should be sought.
2.6 Tenancies let before 4 January 2009 OR the current tenant has been in the same property for more than 10 years
2.6.1 If, since 4 January 2009, the dwelling has not been let to a new tenant or sold as a single rental, then an EPC is not required. However, if an EPC has been generated for another reason, such as Feed-in Tariffs, such properties would have to meet the minimum energy efficiency standards set out in these Regulations. However, should a change in tenancy occur, this could trigger the need for an EPC and therefore meet the minimum energy efficiency standards set out in these Regulations. Landlords may therefore still wish to work towards the minimum energy efficiency standards, to future proof their investment.
2.7 Tenancies on Agricultural Holdings and Holiday Lets
2.7.1 The Housing (Scotland) Act 2006 (Modification of the Repairing Standard) Regulations 2019 (the modification regulations), makes a number of changes to the Repairing Standard. New elements in the standard will apply from 1 March 2024 to allow private landlords time to bring their properties up to the standard. Notably this includes that space heating must be by means of fixed heating system from this date. More information, can be found at https://www.gov.scot/publications/regulations-to-modify-repairing-standard-summary/.
2.7.2 The modification regulations also make provision about who the Repairing Standard applies to. The regulations:
- clarify that short holiday lets are not subject to the Repairing Standard – confirming that lets of less than 31 days for the purpose of a holiday are not covered by the Repairing Standard and therefore will not be covered by the PRS minimum energy efficiency standards;
- provide that various types of tenancies on agricultural land will be required to meet the Repairing Standard, from 28 March 2027. This gives a lead in time for landlords to prepare their investment plans.
2.7.3 Landlords of these tenancies on agricultural land may still want to take action to improve the energy efficiency of their properties now, and should consider contacting Home Energy Scotland for free and impartial advice.