HMO’s and EPC Certificates

Do HMO’s require an EPC? Houses of multiple occupation (HMO) are something of a grey area when it comes to EPC certificates. In fact, it’s so grey that even the government are sitting on the fence. At one stage the how to rent checklist that all landlords must provide to their tenants included text specifically excluding HMO landlords from having to provide their tenants with an EPC. This text has recently been removed from the guide.  

Self-contained properties

MEES (minimum energy efficiency standards) only applies to ‘self-contained properties’. In the classic HMO scenario, a number of tenants rent a property and have exclusive use of the bedrooms but share a kitchen and a bathroom’ Each tenant has a contract with the landlord for the parts they have access to, but not the whole dwelling. An EPC certificate is not required.

Joint tenancies

This seems clear; however, it is not simply the status of the property as a HMO which results in the exemption. If our example HMO were instead let to a group of friends under a joint tenancy, an EPC certificate would be required. This is often the case in the student accommodation market where most landlords prefer a joint tenancy due to the relatively short tenure of most student lets.

Section 21 notices

While case law is clear via Home Group Ltd v Henry (2018). The judge concluded that an HMO room was not a building or a unit within a building and as such an EPC was not required. However, Mary Latham has concerns about the practicalities of serving a valid section 21 notice without an EPC.

In an article on Landlord Vision, she notes that one of the qualifying questions for issuing the notice is ‘…was a valid energy performance certificate given, free of charge to the defendant’. The issue is that you are only permitted to respond with yes or no. There is no option or opportunity to qualify a negative response and her concern is that this may impact your ability to seek possession of your property.

In the same article, she also points out that in a number of places the Valuations Office Agency are re-branding HMOs and making them rooms in a self-contained unit with their own council tax band – separate dwellings that will need an EPC.

These grey areas and potential issues around possession could be the reason that many landlords in HMO properties do have an EPC, even though they are not required.

Planning ahead

There are two further reasons to think about getting an energy performance certificate for your HMO property.

Firstly a number of observers believe that the existing exemptions for HMO properties will be removed in the near future as part of a wider reform. Secondly, to sell the property you will need a EPC certificate, so if disposal is part of your long-term strategy it makes sense to start planning now.

If you have other questions about EPC certificates visit our FAQ section for concise answers.