Energy performance Certificates for Holiday Homes: Department For Communities Slips out New Confusing Guidance
The issue of providing energy performance certificates for holiday homes has taken a new and confusing turn as the Department for Communities and Local Government has issued new guidance on the issue.
Guidance published in 2012 was something of a victory for EASCO and the tourism industry as the Department climbed down on its previous stance and accepted that a holiday home did not need an energy performance certificate. EASCO has maintained all along that it is pointless to go to the trouble and cost of obtaining an EPC for a property that is mostly used in the summer season and that is only used by short-term guests who are unlikely to be greatly concerned by the energy performance of a building in which they are only staying for a short time.
It has emerged that the Department, without consultation or telling anyone, issued new revised guidance in April. The new guidance introduces a number of complicated conditions that are completely unsupported by regulations. The Regulations have not been changed.
The way in which EU directives end up as law in the UK is that, once a Directive is agreed between the EU member states and issued, member states have to translate it into domestic law. This is usually in the form of regulations made by Government and put before Parliament for approval, known as secondary legislation. Any prosecution in the UK would be for a breach of the UK Regulations. Interpretation of those regulations might be influenced by the wording of European law but the regulations themselves are they key statement of the law in England.
Guidance issued by government departments is intended to help people understand the law. Government departments do not have the power to make diktats – we don’t have government by decree in the UK – and guidance is just that, it is not the law. It may influence the courts in their interpretation of the law, but it does not change the law.
The new guidance is an extraordinary document because it introduces a range of criteria that are not mentioned at all in the Energy Performance of Buildings (England and Wales) Regulations 2012,
The new guidance says this:
Holiday lets may not need an EPC. An EPC will only be required for a property rented out as a furnished holiday let, as defined by HMRC, where the building is occupied for the purposes of a holiday as a result of a short term letting arrangement of less than 31 days to each tenant, and is rented out for a combined total of four months or more in any 12 month period, and if the occupier is responsible for meeting the energy costs for the property. The property must meet all the conditions of a furnished holiday let as defined by HMRC and the occupant must not be responsible for the energy costs in order for an EPC not to be necessary.
This of course does say that where the holidaymaker is not paying the energy bills an EPC is not required so even if this new guidance is followed, an EPC is not needed for a typical holiday let. It is rare for an occupier to pay directly for electricity by coin-in-slot meters or smart meter technology.
However the astounding thing about this guidance is that none of this is contained in the regulations. It is perhaps fortunate that the preamble to the guidance states
The Department for Communities and Local Government (DCLG) cannot provide legal advice. Therefore, it is important to read and understand the regulations. It will be for individuals themselves to take a view on whether or not they fall within the requirements of the regulations and in cases of doubt should seek their own legal advice.
The chances of a prosecution, which can only be for a breach of the Regulations themselves, would seem extremely slim. However, there is a further story that explains why this change has been made by the DCLG.
An organisation called IDEA, the Institute of Domestic Energy Assessors, complained to the European Commission that the UK was in breach of the EU Directive by not requiring EPCs for holiday homes. Late last year the Commission sent the UK a “Reasoned opinion”, hailed by IDEA as a “victory” allegedly confirming that holiday homes ought to be required to have an EPC and that the UK is in breech of the
EASCO is trying to obtain a copy of this “Reasoned Opinion”, which is not published.
The change in the guidance is the DCLG response to the Reasoned Opinion and the Commission has apparently expressed itself satisfied that the UK was now compliant, even though no change in the
law has been made at all.
According to Energy Assessor magazine, IDEA are not satisfied with what they perhaps rightly regard as a “fudge” and are preparing a second complaint to the Commission.
The Energy Assessors are obviously motivated by the opportunity to generate considerable work for their members at the expense of our members!
EASCO is working with the Country Landowners Association and the Tourism Alliance to explore this issue further. So long as there is no change to the UK Regulations, owners simply letting for
holidays on a licence to occupy are advised not to spend any money on getting an unnecessary EPC.
EASCO Contact Information:
Chief Exec: Martin Sach
Tel: 020 7078 7329