Stroma Certification has released its response to the Non-Domestic Private Rented Sector Energy Efficiency Standards: EPC B Future Trajectory Implementation consultation.
This consultation sets out to review the proposed framework to improve implementation and enforcement of the EPC B target by 2030 for privately rented non-domestic buildings.
Earlier consultation responses revealed concerns regarding the way in which the exiting Minimum Energy Efficiency Standards (MEES) have been implemented. The government has therefore set out proposals to:
You can read Stroma Certification’s response below in full.
Question 1: Should listed buildings and those in conservation areas which are to be rented out be legally required to have an EPC?
Yes, all buildings should be required to have an EPC to measure the performance of the property and feed into the overall public data. Also, older buildings are some of the worst performing buildings from an energy consumption, carbon emissions perspective, so they should sit within the scope of the regulations.
It doesn’t make sense for Listed/Protected buildings to, in essence, be left behind in the journey towards more efficient buildings and ultimately achieving net zero (accepting that not all buildings can get to that standard using current technologies). Technologies, costs, building standard and even building statuses can change over time, and with an EPC being valid for 10 years, it is possible for all of these factors to change. Stroma Certification’s recommendation is that all buildings should be assessed, improved where possible using available and permitted measures and relevant exemptions applied for, followed by a review after 5 years to ensure the exemption still applies.
Question 2: Do you support the Government’s proposal to introduce an EPC C interim milestone in 2027? If so, are there any amendments you would make to the proposals? If you disagree with the proposal, please explain why and what your preferred approach would be. Please provide evidence where you can.
Yes, the interim makes it more likely that properties will be upgraded over time as we build towards target B buy 2030. Having a compliance window seems sensible, and we support the 2-year period to allow sufficient time for these changes to the property to be made.
Question 3: The Government recommends respondents read the consultation in full before responding to this question, so that responses can take into account the full suite of changes which the Government suggests should accompany the ‘compliance window’ proposal. Do you support the Government’s proposal to improve the implementation and enforcement of non-domestic MEES by introducing compliance windows? If so, are there any amendments you would make to the proposals? If not, please outline why, stating what your preferred approach would be. Please provide evidence where you can.
Yes, of particular importance is the requirement for a post-improvement EPC to record any material changes to the property. This is essential for measuring improvements to the energy performance of a property and the only way to produce documentation, lodged with the government register along with the related data. This will have two key outcomes: it brings QA from an approved Certification Body and also allows government or other parties to use up to date data for analysis and KPIs.
Question 4: Do you support the introduction of a six-month exemption for shell and core let properties? If so, are there any amendments you would make to the proposals? If you disagree with the proposal, please explain why and what your preferred approach would be. Please provide evidence where you can.
Yes, Stroma Certification supports the introduction of a six-month exemption for shell and core let properties. We would like to see a definition of Shell and core stated within the regulations and within relevant government guidance so all stakeholders can refer to this. In terms of the Non-domestic EPC methodology, ‘Shell and Core’ relates to new buildings subject to first fit out only. It appears that the proposal also includes existing buildings stripped of their services prior to a new incoming tenant falls into the definition of Shell and Core state and this must be clarified.
Question 5: We welcome views on where improvements could support the transition from the current EPC E requirement, to the proposed new implementation and enforcement framework.
We would encourage more communication between government and Certification Schemes and software providers, such as EPC methodology forums including the currently running EPC conventions meeting and other cross scheme methodology meetings. By attending these meetings all stakeholders would have a greater understanding of the grey areas where methodologies meet and cross. There is an opportunity to discuss and review the known calculation inaccuracies contained within the NCM methodology used to calculate Non-Domestic EPC’s.
The technical steering group/methodology working group for NDEA EPCs hasn’t run for many years and in general the Schemes have very little involvement in the way the methodology develops. The updating of methodology, recommendations and conventions and the EPC itself is essential ongoing work (we recognise these shouldn’t be updated in line with any single policy) and Stroma Certification and the other schemes should be involved as we have a view and crucial interaction with the energy assessors who will be heavily involved in MEES.
Question 6: Do you agree with the proposals to strengthen enforcement requirements to support non-domestic MEES under the PRS Regulations? If not, please explain why.
Yes, Stroma Certification supports this. MEES will only be effective in improving the energy efficiency of PRS buildings if there is capable and effective enforcement of any building that doesn’t meet the requirements of the regulations.
Question 7: Do you support the introduction of a PRS property compliance and exemptions database to support enforcement of the PRS Regulations under the new EPC B framework? If not, please explain why.
Yes, Stroma Certification supports this.
Question 8: Do you agree with the proposed landlord registration fee for the PRS property compliance and exemptions database? If not, please explain why.
Yes, this would help to prevent misuse of the database.
Question 9: Do you agree that £5,000 is a suitable maximum limit to set as the penalty for non-compliance with the new framework requirements? If not, please explain why.
Yes, we would agree that a maximum penalty for non-compliance should be set to £5000. If the government is successful in obtaining primary powers on letting agents and online property platforms, it would seem reasonable to review a penalty system appropriate for when one such body markets a property that does not comply with the regulations.
Question 10: We welcome views on the clarity of the current PRS Regulations in relation to enforcement of penalties for non-compliance with MEES.
As long as local authorities feel supported in their pursuit of administering a penalty regime then we feel that there is sufficient clarity. If cost of enforcement is a factor, then a percentage of the penalty fee could be given to the local authority to offset the cost of enforcement.
Question 11: Should the Government allow local authorities to issue a request to landlords and tenants to inspect properties for compliance under the PRS Regulations? If not, please explain why.
We would support this as long as the person carrying out the inspection on behalf of the local authority is a certified energy assessor. This would be essential as the person carrying out the inspection would need to have an in depth understanding of EPC’s, the relevant Part L Building Regulations and the methodology surrounding them in order for them to be able to identify any discrepancies between the EPC and what is on site, understand how buildings can change (sometimes quickly) and if this impacts on the current rating and MEES regulations.
Question 12: Do you agree that all exemptions should be reviewed at the start of each compliance window? If not, please explain why.
Yes, Stroma Certification agrees with the proposed cycle.
Question 13: Do you support the introduction of a standardised calculator to simplify the requirements for the payback test? If not, please explain why.
Yes, Stroma Certification supports this. The calculator could be further supported by its own methodology and compliance checking process. Stroma Certification sits on the EASOB group for EPBD schemes and this forum could assist in the creation of a quality assurance / certification scheme.
Question 14: What are your views on whether the three quotes requirement should be kept for certain circumstances, where landlords wish to dispute the standardised costs, and how would the requirement work in such circumstances?
There is a risk that the 3 quotes system could be abused, however where landlords wish to dispute the standardised costs there should be an appropriate appeals procedure in place. This could include the landlord using the 3 quotes method, this should then be verified by the register as they are dealing with the appeal.
Question 15: Should the Government seek primary powers to introduce tenant responsibilities duties for MEES compliance under the PRS Regulations for non-domestic properties, and to introduce duties of mutual cooperation for landlord and tenant? If not, please explain why. If so, what do you think these duties should consist of? Please explain your reasons and give examples where possible.
There must still be a landlord duty so that tenants are protected, however in scenarios such as shell and core a mutual cooperation to comply would seem appropriate if properly documented in a contracted agreement.
Question 16: Do you think that smart meters could play a role in supporting landlords to meet Government energy efficiency requirements such as the PRS Minimum Energy Efficiency Standard under the PRS Regulations? What are the key benefits/barriers of smart meters playing a role?
No, at present the EPC methodology does not account for actual fuel usage, however, it would make it easier for tenants to see exactly how much fuel is being consumed on site which could be helpful when looking to see which improvements would have a greater impact. Recording energy usage data would be helpful when considering payback calculations. This could be built into the payback calculator making it more accurate.