4 Exemptions to the standard
4.1 Relevant energy efficient improvements
4.1.1 Regulation 8 establishes what is considered to be a relevant energy efficiency improvement.
4.1.2 A relevant energy efficiency improvement is defined as an improvement and identified as a recommended improvement for the property in:
- A Green Deal report;
- The recommendations report of the EPC certificate; or
- A report prepared by a surveyor.
4.1.3 An energy efficiency improvement is a relevant energy efficiency improvement where the cost of purchasing and installing it can be financed by means of funding provided by a grant or loan from Scottish Ministers.
4.1.4 The landlord does not need to meet minimum standards subject to:
- The landlord making all relevant energy efficiency improvements; or
- There are no relevant energy improvements that can be made to the property.
- The landlord must register information with the local authority to support this by way of a valid exemption.
If a landlord is seeking an exemption from the standard they must obtain in writing, from a relevant person or independent installer (who meets the relevant installer standards), advice that the measures recommended are not appropriate because of the possible negative impact on the fabric or structure of the building.
4.2 Consent exemption
4.2.1 Regulation 11 states that if the landlord has not been able to make relevant energy efficiency improvements to the property to meet minimum standards of energy efficiency as a result of a refusal of third party consent, the landlord will be exempt from meeting minimum standards, and must register a valid exemption with the local authority. This exemption will apply:
- if a tenant/third party is refusing consent or access;
- if a tenant/third party has granted consent or access but subject to a condition the landlord cannot comply with;
- until the tenancy changes; or
- for a period of five years.
4.3 Cost cap exemption
4.3.1 Regulation 12 provides for exemptions on the basis of the cost of making the relevant improvements. The property will be exempt provided the landlord gives proof of this to the local authority. The landlord will be expected to make any other relevant energy efficient improvements up to the cost cap.
4.3.2 The cost cap will apply where the costs of meeting the relevant minimum standards of energy efficiency improvements exceed:
- £5,000 to reach an EPC E from 1 April 2020 for new lets or;
- £5,000 to reach an EPC E by 31 March 2022 for all PRS properties;
- an additional £5,000 to reach an EPC D from 1 April 2022 for new lets or;
- an additional £5,000 to reach an EPC D by 31 March 2025 for all PRS properties.
4.3.3 Where a landlord incurs expenditure in efforts to reach the minimum required standard in advance of the Regulations coming in to force, but still is unable to reach that standard and relies on the cost cap to seek a valid exemption, the landlord should provide evidence of any relevant expenditure dated 6 months prior to the introduction of the Regulations. Such costs will be taken into account in the consideration of the exemption. Costs incurred prior to that date will not be taken into account.
4.4 Temporary exemptions in certain circumstances
4.4.1 Regulation 13 provides for particular circumstances where a property is exempt from minimum standards for a temporary period. This allows for circumstances where there are changes to the landlord of the property or changes to the circumstances which exist between the landlord and tenant. For example, if a landlord inherits a property with a sitting tenant, or purchases a property with a sitting tenant, they are exempt from meeting minimum standards for a period of six months, provided the exemption is registered with the local authority.
4.4.2 In the event that a landlord is seeking a valid exemption based on this Regulation, they may wish to seek legal advice to confirm their eligibility and should then register that exemption with the local authority.
4.5 Exemption lengths
4.5.1 Most exemptions will last for 5 years, unless there is a temporary abeyance, for example where there are protected species that cannot be disturbed.
4.6 Examples of exemptions and proof required:
4.6.1 Relevant energy efficiency improvements - If the landlord cannot carry out relevant energy efficiency improvements without causing damage to the fabric of the building, the landlord must show proof to the local authority. The proof must be a letter from a relevant person or independent installer, confirming that the proposed improvement would cause damage to the fabric of the building.
4.6.2 Excessive cost - The landlord must show proof to the local authority of three estimates for the work from different installers, including value added tax (VAT) that confirm that the cheapest relevant improvement would exceed the cost cap (see section 3.1). The landlord should also confirm that they are satisfied that the measures exceed the cost cap.
4.6.3 Tenant refusing access to carry out the work – If the current tenant refuses consent to any relevant energy efficiency improvement being made, or if the landlord has been unable to gain the tenant’s consent, despite making reasonable efforts to obtain that consent, the landlord must show proof to the local authority that they have made reasonable attempts to contact the tenant to gain access to carry out work. This should include dated copies of correspondence to the tenant to allow ongoing review against the prescribed 5 year period.
4.6.4 Other owners in a property or communal property refusing consent to have the work carried out – The landlord must show proof to the local authority that they have contacted the other communal owners regarding the work to be done and that they have refused or failed to respond to the requests.
4.6.5 Protected species that cannot be disturbed - The landlord must provide confirmation from a body such as Scottish Natural Heritage (SNH), or appropriately qualified person, to the local authority that a particular protected species is in place in their property. This exemption should be reviewed regularly by the local authority. If the protected species is no longer in place, the landlord should take action to carry out any relevant energy efficiency improvements.
4.6.6 Listed buildings and conservation areas - If the relevant improvements cannot be carried out on the property as it affects the listing or conservation status, other measures that are more appropriate to the building should be installed. The landlord can take advice from Historic Environment Scotland on appropriate measures.
4.6.7 Disposal - When the landlord plans to dispose of a property through demolition the landlord must give the local authority a copy of the demolition notice or closing order registered against the property.
4.7 The PRS Exemptions Register
4.7.1 Local authorities will establish and maintain their own register of exemptions (Regulation 16) that will record the type of exemption, the proof of exemption and the date the exemption is valid until. Landlords must supply proof of their exemption to the local authority.
4.7.2 Scottish Government will provide a common template for local authorities to record and monitor exemptions.