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Been told energy certificate is a big problem - help!

 
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Running Chrissy



Joined: 07 Oct 2016
Posts: 35

PostPosted: Tue Apr 04, 2017 4:56 pm    Post subject: Been told energy certificate is a big problem - help! Reply with quote

In the process of buying a cottage to run as a FHL and our solicitor has just told us that the whole thing may be in jeopardy as the EPC rating is F and therefore will not meet the minimum standard when the new energy regs come in next year.

I asked if those regs (£4K fine if don't meet E rating) def applied to holiday lets and she said her understanding was that it did unless they fell under exemptions such as listed buildings.

But looking through the archives here it seems that there was at some point clarification that FHLs were exempt. However I have read that the European Council lobbied to get that changed. Is there any actual official clarity on this??!!

The reason it may sink our purchase is not so much the cost of upgrading the property (although that is a factor), but more that it could invalidate our mortgage offer, apparently.

Help!
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zebedee



Joined: 12 Sep 2014
Posts: 729
Location: yorkshire dales

PostPosted: Tue Apr 04, 2017 5:29 pm    Post subject: Reply with quote

If you decide to be graded by Visit England, you will be asked to produce a lot of paperwork including gas safety certificate, public insurance liability etc etc but I have never been asked for an EPC certificate.
I think that should answer your question.

Good luck with your business.
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Running Chrissy



Joined: 07 Oct 2016
Posts: 35

PostPosted: Tue Apr 04, 2017 5:41 pm    Post subject: Reply with quote

Thanks Zebedee, that's good to hear but the new regs come into force in 2018. Also our lender may withdraw their offer, we're told, because of this.

However I may have found chapter and verse on the DCLG website which sounds like FHLs are indeed exempt (I think!)

Quote:
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. Please see the Glossary for the full definition of
a Furnished Holiday Let.

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Sandra J



Joined: 30 Aug 2015
Posts: 32
Location: North Yorkshire

PostPosted: Tue Apr 04, 2017 8:52 pm    Post subject: Reply with quote

In 2010 we started renting out a property as a holiday let through Cottages4you and were told we needed to have an EPC done. Cost was £65. As we pay all the bills I am not sure why it is relevant.
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newtimber



Joined: 24 Nov 2012
Posts: 1513
Location: Brighton

PostPosted: Wed Apr 05, 2017 5:48 am    Post subject: Reply with quote

If you are going to buy the property, I would upgrade to get the EPC rating to E anyway.
Although the exemption is in place at the moment, if the rules change, then you will have to close the property and do lots of work after you have started getting your bookings.
It also means that if FHL doesn't work out, you then have the option of a permanent let as a backup plan.
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Running Chrissy



Joined: 07 Oct 2016
Posts: 35

PostPosted: Wed Apr 05, 2017 6:29 am    Post subject: Reply with quote

Good point Newtimber. We are doing a renovation and would want it to be as energy efficient as possible, not least because it will save our energy bills.

The issue is that our solicitor is concerned that we won't be able to get a mortgage on an F-rated property. I'm hoping that won't happen but I can see how it might - because although *we* know we're going to do it up, the building society may only lend on what they see in front of them.
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greenbarn



Joined: 30 May 2009
Posts: 5886
Location: The Westmorland Dales, Cumbria

PostPosted: Wed Apr 05, 2017 8:39 am    Post subject: Reply with quote

Sandra J wrote:
In 2010 we started renting out a property as a holiday let through Cottages4you and were told we needed to have an EPC done. Cost was £65. As we pay all the bills I am not sure why it is relevant.


Cottages4u got it wrong. Not that surprising as there was a lot of hype going on and there was a general assumption that FHLs would need an EPC, which was fuelled by those offering the service and telling everyone they’d go to jail if they didn’t have one by tomorrow etc etc.

It took a legal challenge mounted by EASCO to take on the government at the time and prove them wrong. It was obvious nonsense that a place that was only let during the summer months and not during colder times should need an EPC, but EASCO needed to engage a specialist barrister to beat up the authorities, based primarily on the definition of “tenant” (and we never, ever refer to FHL guests as “tenants”).

Which is why we should all be paying the measly forty quid a year or whatever it costs to be a member of the only organisation that actually represents our interests.
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greenbarn



Joined: 30 May 2009
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Location: The Westmorland Dales, Cumbria

PostPosted: Wed Apr 05, 2017 8:47 am    Post subject: Reply with quote

Running Chrissy wrote:
Good point Newtimber. We are doing a renovation and would want it to be as energy efficient as possible, not least because it will save our energy bills.

The issue is that our solicitor is concerned that we won't be able to get a mortgage on an F-rated property. I'm hoping that won't happen but I can see how it might - because although *we* know we're going to do it up, the building society may only lend on what they see in front of them.


Yes to what Newtimber suggests.

Does the building society realise that the property is going to be used as an FHL, is it restricted to only being used as an FHL (or not being used as an FHL for that matter)?

Another thought is building regs for any improvements - if you’re going to use the property as an FHL the local inspectorate may apply different criteria regarding safety issues; no idea if they consider energy efficiency as part of the process (plus it seems to vary depending on where you live...)
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Running Chrissy



Joined: 07 Oct 2016
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PostPosted: Wed Apr 05, 2017 9:42 am    Post subject: Reply with quote

Hi Greenbarn
It's a specific holiday cottage mortgage from Leeds so they should. But there aren't any specific restrictions afaik.
We don't have an issue with bringing it up to scratch, we totally want yo do that. But I can see us being in a catch 22 when we can't even buy it because it's not already up to scratch.
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Nemo



Joined: 14 Aug 2008
Posts: 7004
Location: Norfolk

PostPosted: Wed Apr 05, 2017 10:49 am    Post subject: Reply with quote

I think you should probably take more notice of what Greenbarn has said on this matter than your solicitor! Holiday lets are a very specialist area and so many people give out misinformation. Everything he said about EASCO is correct and I would pay more heed to their knowledge on holiday letting than a solicitor who probably doesn't know very much about it.

You could just ring Leeds if you're worried and try getting it from the horses mouth. Nothing lost as far as I can see; it will come out sooner or later that you have this EPC rating so you may as well try and drill down to the facts from their perspective.
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Running Chrissy



Joined: 07 Oct 2016
Posts: 35

PostPosted: Wed Apr 05, 2017 11:21 am    Post subject: Reply with quote

Thanks Nemo, yes I do trust what Greenbarn has said , plus I managed to find the guidance on DCLG website which specifically exempts FHLs.

I was just a bit blindsided by this from our solicitor because it was the first I'd heard of it!
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COYS



Joined: 06 Jun 2015
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PostPosted: Wed Apr 05, 2017 4:54 pm    Post subject: Reply with quote

There is hardly a significant difference between an F & E energy rating, so any upgrade should be easily & fairly cheaply accomplished. Couldn't you just get the required improvements/timescale written in as a mortgage condition?
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