Energy efficiency regulations: recent case developments

Three recent Tribunal decisions in Naveed v City of Bradford Metropolitan District Council UKFTT 00305 (2025), Kenyon v London Borough of Islington (2025) UKFTT 260 (GRC) and Soor v Luton Borough CouncilUKFTT 259 (GRC) highlight the importance of Local Authorities following appropriate procedures for issuing penalty notices ('PN') and assessing the level of fines to be contained in them, where a landlord fails to comply with the Energy Efficiency (Private Rented Property) Regulations 2015 ('EPC').

Background

The EPC Regulations 2015 were enacted to improve the energy efficiency of certain private rented properties. Part 3 of the Regulations governs the minimum level of energy efficiency and provides that subject to certain exemptions, a landlord of a domestic private rented property must not grant a new tenancy of the property after 1 April 2018 and must not continue to let the property after 1 April 2020, where the energy performance does not fall within, or above Band E. Properties which fall below this rating are considered to be "sub-standard" according to Regulation 22.

Regulation 23(1) of the 2015 Regulations provides that a landlord of a “sub-standard domestic PR property” must not let the property on (among other things) an assured tenancy for the purposes of the Housing Act 1988 unless certain exemptions apply. These exemptions are set out in Chapter 4 of the 2015 Regulations.

Regulation 38(1) of the 2015 Regulations provides that a local authority may serve a penalty notice on a person who is a landlord, in any case where it is satisfied that the person is or has been at any time in the previous 18 months, in breach of Regulation 23 and /or Regulations 37(4)(a). A penalty notice may impose a financial penalty, a publication penalty, or both penalties concurrently. A ‘publication penalty’ involves publication of certain information about the landlord’s breach (or breaches) on the PRS Exemptions Register for a period of at least 12 months (see Regulation 39).

Where a landlord has failed to comply with a compliance notice in breach of Regulation 37(4)(a), any financial penalty imposed for that breach may not exceed £2,000 (see Regulation 40(5)).

 Under Regulation 40, where a landlord has breached Regulation 23 and, at the time the penalty notice is served has, or had, been in breach for three months or more, the penalties are:

• A financial penalty not exceeding £4,000
• The publication penalty.

Where the landlord has been in breach for less than three months the penalties are

• A financial penalty not exceeding £2,000
• The publication penalty.

In total, the financial penalties in a Penalty Notice may not in aggregate exceed £5,000.

An appeal to the Tribunal may be made on the grounds that:

• The issue of the penalty notice was based on an error of fact
• The issue of the penalty notice was based on an error of law
• The penalty notice did not comply with a requirement imposed by the 2015 Regulations
• In the circumstances of the case it was inappropriate for the penalty notice to be served on the landlord,

and the Tribunal has the power to quash the penalty notice, or to affirm the notice, whether in its original form or with such modifications as the Tribunal sees fit (see Regulation 44(2)).

Naveed v City of Bradford Metropolitan District Council UKFTT 00305 (2025)

Brief summary of the facts of the case: An appeal was brought against the decision contained in a penalty notice dated 6 November 2024 whereby Mr Naveed was ordered to pay £4000 for a breach of Regulation 23 of the EPC Regulations 2015.

Legal issues: The PN stated that Mr Naveed had let a domestic property to a tenant from at least 2 June 2023 onwards; the property was let with an EPC rating of F, which falls below the required rating of E and above. The £4000 maximum penalty was imposed as the property was let with a substandard rating for a period of more than three months. Mr Naveed also faced a publication penalty for failing to comply with the Regulations; His name and details of the Breach were published on the PRS Exemption Register for 12 months. Finally, Mr Naveed was required to carry out the necessary works to ensure the property complied with the 2015 regulations.

Mr Naveed contended that there was an individual living at the premises who was carrying out the required works but who was inefficient and subsequently removed from the property, causing delay to the works. He also stated that he did not receive any notice or final notice that required him to obtain a higher EPC rating for the property and stated that he was away from the UK for two weeks in December which impacted his ability to resolve the EPC issues. However, Bradford Council provided a certificate of service dated 6 November 2023 and the Tribunal found that his absence from the UK was found to be irrelevant for the purpose of mitigation in their assessment of the breach committed.

Decision: The Council had validly served the notice on Mr Naveed who was in breach of Regulation 23 of the 2015 Regulations. The maximum penalty imposed was "reasonable and proportionate" in the circumstances; Mr Naveed was found to be "an experienced landlord" who "was aware of the need to renovate the property to make it liveable" but instead tried to "do as little as he could, as cheaply as he could".

Learning Point: An experienced landlord who is aware of their obligations under the EPC Regulations and who does not have a valid exemption, must complete the necessary works to their property as swiftly as possible. Non-compliance with PNs validly served after 3 months gives rise to a higher penalty, and the imposition of a maximum penalty can be justified.

Kenyon v London Borough of Islington (2025) UKFTT 260 (GRC)

Brief summary of the facts of the case: An appeal was brought against the decision contained in a penalty notice dated 14 August 2024, whereby Mr Kenyon was ordered to pay £2,000 (or £1,000 for payment within 14 days). The PN was served under regulation 41, for a breach of regulation 27[1] of the EPC Regulations 2015.

Legal issues: On 22 March 2016, an EPC was issued in respect of the property, rating it as G according to the 2015 regulations. On 6 July 2016, the landlord let the property. On 1 April 2023, the regulations were amended so that non- domestic properties cannot be let (or continue to be let) unless the property has an EPC of a least an E.

On 28 July 2024, the property was assessed for an EPC and rated C. However, it became apparent that the property had been let with an EPC of grade G from 1 April 2023 - 27 July 2024, therefore breaching the regulations. Accordingly, the fine was issued against Mr Kenyon, who disagreed with the amount imposed.

Decision: The Council was held to have followed the correct processes. It gave clear and unambiguous evidence about the policy and practice of determining the level that the fine is to be assessed at, and described in detail the review process where a fine for a PN is issued. Their approach was found to be "reasonable and proportionate in all the circumstances".

Learning point: Any local authority which is required to serve a PN should be prepared to give clear and unambiguous reasons for issuing a PN and to provide clear explanations of the process and factors considered for determining the penalty.

Soor v Luton Borough Council UKFTT 259 (GRC)

Brief summary of the facts of the case: Mr Soor was issued with numerous penalty notices on 30 May 2023 under regulations 38 and 42 which required him to pay revised penalty charges of £333.33 in respect of each of 19 specified letting properties owned by him (totalling £6,336.50) because (1) he had let substandard properties between 8 December 2022-15 March 2024, (2) he had no valid EPC certificates, (3) he failed to comply with a compliance notice requiring him to produce a valid EPCs.

Legal issues: Mr Soor was issued with a warning letter on 30 January 2023, a notice of intention to issue a financial penalty on 13 Feb 2023 and then issued financial penalty notices on 15 March 2023, equating to £500 per property and £9,500 total. After considering mitigating factors such as financial and marital difficulties, the Council ordered Mr Soor to pay a reduced final total fine of £6,336.50. He contended that this sum was excessive given certain personal difficulties and apologised for failing to comply with the regulations.

Decision: The Council properly served the PN and set an appropriate penalty amount (of £500 initially). The adjustment of £333 per property was considered 'on the generous side' and the Tribunal found that the overall penalty was not excessive. Mr Soor's personal mitigation was not " weighty in the scheme of things". The Tribunal noted that it is not justifiable to impose a lower penalty due to the volume of breaches committed. No ground of appeal under regulation 43 had been established.

Learning point: The Tribunal again reiterated that a council should be clear on what basis it is revisiting any decision to impose a penalty and should explicitly refer to the provisions engaged.

Conclusion

Local Authorities must be wary of following the correct processes when issuing PN's and keeping in mind the principles of reasonableness and proportionality in imposing financial penalties. An experienced landlord must remedy any issues with their EPC's as soon as possible as this could give rise to additional financial penalties being imposed against them. Poor excuses for failing to take mitigation measures unsurprisingly will not be accepted by Councils or the Tribunal.

[1] a Landlord must not let sub-standard non-domestic private rented (NDPR) property.