Energy efficiency and condition standards in private rented housing: consultation analysis

Timing, costs and enforcement

The Scottish Government thinks that the costs associated with the proposals will be relatively low, in comparison to on-going liabilities for repairs and maintenance, provided that sufficient lead in time is allowed. However, they think there will be some exceptions - for example, it could be costly for landlords of agricultural tenancies to bring them up to the existing repairing standard. They also consider that it may be appropriate to have different timescales for different elements, provided that this is not unduly complex.

Question 2.25 - Do you think that there should be a lead-in time of at least 5 years for landlords to comply with any changes to the repairing standard?

Table 41: Question 2.25 – Responses by type of respondent

Type of respondent	Yes	No	Don't know	Not answered	Total
Organisations:
Energy-related private sector	1			4	5
Landlord	17	1	1	9	28
Letting agents etc.	10			2	12
Local Authority	18	2	1	1	22
Other		1		3	4
Professional body	12	1		13	26
Third sector	2	1		8	11
Total organisations	60	6	2	40	108
% of organisations answering	88%	9%	3%		100%
Individuals	63	13	5	9	90
% of individuals answering	78%	16%	6%		100%
All respondents	123	19	7	49	198
% of all respondents	62%	10%	4%	25%	100%
% of all those answering	83%	13%	5%		100%

A majority of respondents, 83% of those answering the question, thought that there should be a lead-in time of at least 5 years for landlords to comply with any changes to the repairing standard. Organisational respondents were more likely to agree than individual respondents (88% and 78% respectively).

Question 2.26 - Do you think that different lead-in times for different measures would cause any difficulties for (a) landlords or (b) tenants? Please tell us what difficulties you think could be caused.

There were around 85 comments at Question 2.26. A large majority of those -commenting had agreed with a lead-in time of at least 5 years for landlords to comply with any changes to the repairing standard at the previous question.

A number of respondents highlighted potential difficulties associated with different lead-in times. Some suggested that 5 years is in any case sufficient time for landlords to implement proposals, including for example ensuring finances are in place.

The most commonly raised difficulty was the potential for staged lead-in times to cause confusion for tenants and landlords. It was suggested that this confusion could also increase the risks of landlords inadvertently failing to comply with specific measures. This was seen as particularly likely given the extent of recent and forthcoming change within the PRS, including the Part One proposals with a two-stage lead in to EPC band E and band D. Linking implementation timescales with other forthcoming changes, including the introduction of the measures set out in Part One, was also suggested.

Specific difficulties for tenants which respondents associated with staged lead-in times were:

• Extended and on-going disruption associated with undertaking the required works.
• Delays to implementation will disadvantage tenants in poor quality accommodation and would appear to put the business interests of landlords ahead of tenants' access to a safe and good quality home.

Specific difficulties for landlords that respondents associated with staged lead-in times were:

• It will be more efficient and potentially more cost effective to implement all elements at one time, rather than returning to properties over a period of time. This could include providing flexibility to undertake works between tenancies to minimise disruption.
• The potential for properties to be removed from the sector if they are not upgraded promptly.

A number of respondents also suggested that staged lead-in times will provide challenges for the local authorities responsible for enforcement.

However, others favoured staged lead-in times and suggested that this would not lead to significant difficulties for tenants or landlords. Other comments included:

• Staged lead-in times would allow landlords to focus on the most significant measures in the short term, including safety critical measures.
• They would allow landlords to better manage cost implications over a period of time.
• Landlords and tenants have experience of new standards and requirements being introduced and should not have significant difficulty with staged lead-in times.
• Clear communication with landlords and tenants should mitigate against the potential for confusion associated with different lead-in times.

Question 2.27 - Do you think that the timetable for changes should be linked to wider government milestones on climate change?

Table 42: Question 2.27 – Responses by type of respondent

Type of respondent	Yes	No	Don't know	Not answered	Total
Organisations:
Energy-related private sector	1			4	5
Landlord	3	6	8	11	28
Letting agents etc.	3	4	3	2	12
Local Authority	10	5	6	1	22
Other				4	4
Professional body	6	5	1	14	26
Third sector	4	1	1	5	11
Total organisations	27	21	19	41	108
% of organisations answering	40%	31%	28%		100%
Individuals	20	41	16	13	90
% of individuals answering	26%	53%	21%		100%
All respondents	47	62	35	54	198
% of all respondents	24%	31%	18%	27%	100%
% of all those answering	33%	43%	24%		100%

Views were mixed at this question although the largest proportion of respondents, 43% of those answering the question, thought that the timetable for changes should not be linked to wider government milestones on climate change. Of the remaining respondents, 33% thought they should and 24% did not know. The majority of organisational respondents (40% of those answering the question), did think there should be a link although the majority of landlord and letting agent respondents did not.

Although there was no specific opportunity to comment, a small number of comments were made at other questions. Comments included:

• Changes in technologies, climate etc. may mean different decisions will be made 10 years from now.
• The timetable should also be linked to milestones related to the eradication of fuel poverty.

Question 2.28 - Are the current enforcement routes via the housing tribunal appropriate for the proposed new measures in the repairing standard?

Table 43: Question 2.28 – Responses by type of respondent

Type of respondent	Yes	No	Don't know	Not answered	Total
Organisations:
Energy-related private sector			1	4	5
Landlord	10	1	7	10	28
Letting agents etc.	7	2	1	2	12
Local Authority	18	3	1		22
Other	1			3	4
Professional body	10		2	14	26
Third sector	2	1		8	11
Total organisations	48	7	12	41	108
% of organisations answering	72%	10%	18%		100%
Individuals	30	13	30	17	90
% of individuals answering	41%	18%	41%		100%
All respondents	78	20	42	58	198
% of all respondents	39%	10%	21%	29%	100%
% of all those answering	56%	14%	30%		100%

A majority of respondents, 56% of those answering the question, thought the current enforcement routes via the housing tribunal appropriate for the proposed new measures in the repairing standard. However, the views of individual respondents were more mixed with 41% agreeing, 18% disagreeing and 41% not knowing.

Although there was no specific opportunity to comment, a small number of comments were made at other questions. It was suggested that enforcement will be key and that the effectiveness of the Housing Tribunal should be kept under review and alternatives looked at if the system is not working.

Another respondent noted that they strongly believe there needs to be a clear route through which tenants can require landlords to bring properties up to standard, should they fail an element of the repairing standard. It was suggested that should include meaningful and clear legal rights backed up by a well-functioning dispute resolution system. The respondent felt that the current arrangements do not deliver these requirements and that necessary changes include making the repairing standard an implied term.

Question 2.29 - Do you think that rules on exceptional circumstances (where landlords are not required to comply with the repairing standard) should be revised to ensure situations such as technically infeasible work, unreasonable costs and withheld consents are covered?

Table 44: Question 2.29 – Responses by type of respondent

Type of respondent	Yes	No	Don't know	Not answered	Total
Organisations:
Energy-related private sector			1	4	5
Landlord	16	1	1	10	28
Letting agents etc.	8	1	1	2	12
Local Authority	18		3	1	22
Other	1			3	4
Professional body	14			12	26
Third sector	1		1	9	11
Total organisations	58	2	7	41	108
% of organisations answering	87%	3%	10%		100%
Individuals	59	9	8	14	90
% of individuals answering	78%	12%	11%		100%
All respondents	117	11	15	55	198
% of all respondents	59%	6%	8%	28%	100%
% of all those answering	82%	8%	10%		100%

A majority of respondents, 82% of those answering the question, thought that rules on exceptional circumstances (where landlords are not required to comply with the repairing standard) should be revised to ensure situations such as technically infeasible work, unreasonable costs and withheld consents are covered. Organisational respondents were more likely to agree that individual respondents (87% and 78% respectively).

Although there was no specific opportunity to comment, a small number of comments were made at other questions.

Respondents who agreed made suggestions as to how the rules should be revised. They included that:

• Any exceptions should have a very restricted scope. In many cases objections on technical grounds may be without sufficient merit.
• There should be an exemption on communal works where the landlord is unable to get consent to proceed from all other owners unless the local authority is willing to exercise its powers to pay the missing shares for non-consenting owners.
• A cost-cap should be put in place that places a time-limited exception to ensure that properties requiring more work are not left vacant as a financial decision on behalf of the landlord. The cap should be lower for Band F and G properties (and later E properties) that will also have to undergo work to meet new energy efficiency minimum standards.

Question 2.30 - Do you have any other views on the measures proposed in relation to: (a) costs (b) timing (c) enforcement?

There were around 65 comments at Question 2.30, with respondents raising a range points relating to cost, timing and enforcement.

In relation to the cost implications of the proposed measures, respondents made the following points:

• Proposed measures have potentially significant cost implications for landlords. These could lead to a reduction in properties available for rent, and/or to increased rent levels. The impact of proposals is likely to be particularly significant for those in rural areas where costs are likely to be higher and rent levels are typically lower.
• The consultation under-estimates the likely cost of implementing proposed measures, and does not recognise the costs associated with other recent and forthcoming changes in the PRS.
• Financial assistance should be made available to landlords to support implementation of proposals, reflecting for example the value of potential health benefits associated with some measures.
• A planned approach to implementation will be important for landlords managing costs and should include clear information for landlords on available financial assistance.

In relation to the timing of proposed measures, respondents made the following points:

• Some discretion should be permitted in the timing of improvement works, including for example where planned works have to be delayed due to faults or issues arising.
• A simplified approach to lead-in times would be preferable, including alignment with target dates for other regulation such as energy efficiency proposals set out in the first part of the consultation.
• The proposed requirement for fixed heating systems will have a positive impact on some EPC ratings and should be introduced in advance of proposed energy efficiency requirements.
• The proposed timetable is ambitious for the range of proposals, and a longer lead-in time is required to enable landlords to plan for implementation – particularly for those with rural and agricultural properties.
• The proposed 5-year lead-in time should be shortened, particularly for urgent items such as residual current devices.
• The earliest date for the most urgent measures should be 2023.

In relation to enforcement of the proposed measures, respondents sometimes referred to the central role of local authorities. Comments included that consistency of enforcement across local authority areas will be important and that the proposals will have a potentially significant impact on resourcing requirements for enforcement agencies. This included reference to the introduction of the repairing standard and third-party referrals having already had an impact on local authority resources.

More "proactive" enforcement including random checks, and more enforcement of "rogue" landlords was seen as important. Other comments related to enforcement approaches and routes, and included:

• The FTT has a central role to play.
• Links should be made to landlord registration and the fit and proper person test.
• Consideration could be given to the role of letting agents in enforcing standards.
• There could be a third-party right of referral for local authorities.
• There could be an option to use rent penalty notices.
• It will be important to engage with landlords, including through the provision of information and advice.

A number of enforcement-related challenges were also identified. These included:

• The proposed changes to Private Water Supplies legislation may apply to private rented properties, which could effectively introduce two regulatory regimes for the sector – the repairing standard should include reference to this.
• Ensuring compliance and dealing with non-compliance is likely to be a particular challenge in mixed tenure blocks.
• There is a need to deal with tenants' reluctance to report non-compliance, including where there are concerns about retaliatory eviction.
• The use of Council Tax records to determine tenancy change is likely to be unlawful, and account should be taken of this limitation on enforcement powers.