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WTA Statement on Energy Performance Certificates for Self-Catering properties

The current situation would appear to be that the Department of Communities and Local Government (DCLG) at Westminster are adamant that the Energy Performance of Buildings Regulations enable them to require an EPC for a property rented out as a holiday let.
Enforcement is a matter for Trading Standards Officers but the Policy Officer for Fair Trading, Local Government Regulation, (LRG) the organisation representing TSOs in England and Wales, does not agree. “It is LG Regulation’s and TSI’s (Trading Standards Institute) view that until this requirement is clearly specified in the EPC Regulations there is no obligation on a holiday let owner to have an Energy Performance Certificate.”

The DCLG have responded with “Their understanding of the Directive and Regulations is flawed and not, we believe, supported by professional legal opinion”.
The DCLG have not made available this “professional” legal opinion - one organisation is considering making a FOI request.

So, what advice do we give to the industry?

For many operators, their knowledge of the requirement for an EPC for their property will be based on various communications received from companies offering to provide these certificates.

For example, one received on 26 April from a company with an office in Swansea starts with “Due to recent legislation, from 1st of April 2011 there is now a requirement to provide that (sic) an Energy Performance Certificate (EPC) for properties that are rented out as holiday lets for 4 months or more in any 12 month period.”

The 1 April was the date originally given by the Department of Communities and Local Government’s website on 29 November 2010; however, this date was subsequently amended to 30 June.

The statement that ‘due to recent legislation’ is incorrect; there hasn’t been any and this is no doubt the reason for a lot of the confusion. Instead, the DCLG issued a statement that “it has been decided to take forward the proposal to amend the DCLG guidance to provide that an Energy Performance Certificate (EPC) must be obtained for properties that are rented out as holiday lets for 4 months or more in any 12 month period.”

They also stated that “The Energy Performance of Buildings Regulations already includes this requirement so there are no regulatory changes to be made.”

 

The guidance notes were changed to “An EPC will be required for a property rented out as a holiday let where the building is occupied as a result of a short term letting arrangement and is rented out for a combined total of 4 months or more in any 12 month period.”

The original guidance notes stated “If the agreement between the parties expressly allows for a short period of holiday occupation only and no intention to create a tenancy can be inferred, then an EPC is not required.”

When challenged on whether the existing legislation only covered lets subject to tenancy agreement, the DCLG have responded with a FAQ sheet, which includes:-

“Surely, letting out your property to holiday makers is not the same as a tenancy agreement so it can’t count as rent can it?

There are many different kinds of tenancy agreement. Holiday lets are one of them. The Housing Act 1988 defines a holiday let as a ‘tenancy the purpose of which is to confer on the tenant the right to occupy the dwelling-house for a holiday’.”

This could be seen as being a complete contradiction of their original guidance as to the meaning of the legislation.

These FAQs also include:-

“How quickly after 30 June 2011 are owners expected to hold an EPC or have commissioned it?
Enforcement is a matter for TSOs to decide. However, the regulations allow owners a reasonable amount of time to comply”.

So operators don’t actually have to have an EPC by 30 June and are TSO’s going to enforce something that they don’t consider to be enforceable?

The Regulations apply to England and Wales - so what are the opinions of our colleagues in England:-

Martin Sach, Chief Executive, English Association of Self Catering Operators 15.03.11
EASCO has identified some legal issues that we have asked the Department for Communities to consider. In our view the current UK legislation does not apply to holiday cottages because the wording of the 2007 Regulations makes specific reference to buyers and tenants. We are therefore disputing the Department's view that a change as proposed can be made by changes to the guidance. We have met the Department and I have followed up this week by letter. We await their response. Readers can see updates on our Facebook page www.facebook.com/eascouk. Our advice to our members is for the time being to get ready to have an EPC done but not yet to spend any money on it.

 

Energy Performance Certificates by English Association of Self Catering Operators on Thursday, 28 April 2011

EASCO is to seek a Queen's Counsel's opinion about the applicability of the existing law on Energy Performance Certificates to holiday letting. The issue is whether the Department for Communities are correct in their interpretation of the existing Regulations as applicable to tenants, widely defined as almost anyone renting a property even for a short time, or whether the ordinary meaning of tenant is applicable, i.e. someone with a tenancy agreement.

14 Mar 2011

This extension has come after considerable lobbying from the industry that the energy performance rating self-catering properties is of little significance to holiday-makers who stay in a property for short period and where energy costs are usually included in the rental price.
The Tourism Alliance has taken up this issue with the Department of Culture, Media and Sport and advised the Minister that it will be one of the pieces of legislation that the industry will be looking to remove as part of the Minister’s newly announced programme to reduce regulatory burden on the tourism industry.

5 May 2011 - WASCO Statement

WASCO has been involved in discussions on this issue since changes were first proposed in May 2010. Submissions were made at the consultation stage strenuously urging that this proposal not be implemented being unwarranted and an additional burden on operators. When guidance was issued in February 2011 few if any changes had been made to the original proposals. WASCO informed members of the guidance issued by DCLG since when it has become apparent that there are widely differing positions between DCLG and Local Authority Trading Standards Central Advisory Team. Despite numerous contacts with both parties it has not been possible to identify an agreed position.
LRG document to Councils 13.04.11

Points to bear in mind pragmatically,
• How much of a priority is this for your council?
• How is your council going to ascertain who owns the holiday let, bearing in mind that the owner may not live there (as it’s a holiday let). This may cost the council a Land Registry fee before a FPN can be issued.
• If challenged on the interpretation of the EPC Regulations, will your council be willing to take this to court (this may be the only way to determine the definition of ‘rented’ in regard to holiday lettings once and for all).
• Clearly, the energy assessors that are calling up owners of holiday lets to persuade them they need an EPC for the holiday let are touting for business. As holiday lets are not specifically cited in the regulations, could this be interpreted as fraud/obtaining money by deception?
• Are the energy assessors’ approaches at all aggressive or misleading, thus subject to CPRs?
So to repeat- what advice do we give to members and clients?
Our comment on the WTA web site last week (“Looks like Energy Performance Certificates for furnished holiday let’s (sic) are here to stay!” ) would now seem less appropriate than the EASCO statement “for the time being to get ready to have an EPC done but not yet to spend any money on it” might be considered rather more useful.
We now have a clear statement on Trading Standards view (not that my local TSO is aware of it) and in view of the Westminster Government’s commitment to reduced bureaucracy, what your MP has to say on this attempt to introduce bureaucracy by the back door. I have been promised a response from my letter to the UK Minister for Tourism, John Penrose by 20Mat at the latest. I had the opportunity recently to discuss grading issues with him especially in respect of self-catering and the continuation of a UK harmonised scheme but a helpful local MP might be more productive in this case.