Electrical safety standards in the private rented sector from 1 April 2021
The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 (the “Regulations”) will apply to existing specified tenancies from 1 April 2021. The Regulations impose duties on residential landlords in relation to electrical installations – with stringent penalties for non-compliance. Landlords in the private rented sector must ensure they are aware of their obligations and take steps to ensure compliance in respect of all specified tenancies. The Regulations only apply to properties located in England.
When do the electrical safety standards apply?
The Regulations are already in force and have applied to all new specified tenancies from 1 July 2020 – they will also apply to all existing specified tenancies from 1 April 2021.
The Regulations only apply to ‘specified tenancies’, meaning a tenancy where the tenant is permitted to occupy the property as their only or main residence in return for the payment of rent (which need not be market rent). This is a broad definition which catches more than just ASTs – for example, certain agricultural tenancies can be specified tenancies and, for these purposes, tenancy includes a licence to occupy. The Regulations replace the electrical safety requirements in the Management of Houses in Multiple Occupation (England) Regulations 2006 so that the same duties now apply to both HMO and non-HMO landlords.
Holiday lettings are not covered by the definition and there are also some specific statutory exclusions. The Regulations will not apply to leases with a term of 7 years or more, social housing, tenancies where the landlord shares the accommodation, student halls of residence, hostels, care homes and tenancies relating to healthcare provision. These types of property will remain subject to the current regulatory requirements relating to electrical safety.
What has changed?
Landlords were already subject to regulatory requirements in relation to electrical safety before the Regulations came into force. The Landlord and Tenant Act 1985 requires landlords to keep electrical installations in the property in good repair and proper working order and local authorities have powers, through the Housing Act 2004, to take action where there are electrical hazards in a property posing a safety risk. All circuits in new or rewired homes normally need to comply with the relevant parts of the Building Regulations. Five yearly electrical installation checks were already required for licensable Houses in Multiple Occupation (HMOs).
The government has published guidance for landlords on the Regulations which acknowledges that “The majority of landlords are proactive when it comes to ensuring the safety of their tenants and make a welcome contribution to the housing market”. However, the Regulations are designed to further improve safety and will involve some additional administration for private landlords as set out below. It is important that landlords are aware of their obligations or they risk a potentially substantial fine and reputational damage.
In relation to specified tenancies, Regulation 3 provides that landlords must ensure that:
- every electrical installation is inspected and tested at regular intervals (of no more than 5 years) by a qualified person who must provide a report;
- the first inspection is carried out before the start of a new tenancy tenancy (or by 1 April 2021 for existing tenancies); and
- the prescribed electrical safety standards are met during any period where the property is occupied pursuant to a specified tenancy.
Electrical installation has the meaning given in regulation 2(1) of the Building Regulations 2010 – the fixed electrical cables or fixed electrical equipment located on the consumer's side of the electricity supply meter. This means the ‘fixed’ electrical parts of the property, like the wiring, the plug sockets, the light fittings and the consumer unit/fuse box but it does not does not include appliances such as cookers, fridges and televisions.
The required inspection must be carried out by a qualified person and the landlord must obtain a report (usually an Electrical Installation Condition Report or EICR). The Regulations simply define a qualified person as being someone who is competent. The guidance for landlords provides further detail and states that landlords can check if the inspector is a member of a competent person scheme or can require the inspector to sign a checklist certifying their competence. The electrical safety industry has established competent person schemes but membership of such schemes is not compulsory. However, it seems likely that landlords will favour using scheme members as this is an easy way to evidence competence.
Landlords must provide a copy of the EICR to any new tenant before they occupy the property. Landlords must also provide a copy to any prospective tenant who requests it within 28 days of a written request from the prospective tenant. Landlords should therefore consider obtaining the EICR at an early stage (e.g. when preparing to market the property). Regulation 3(d) specifically state that landlords must keep a copy of the report until the date of the next inspection so landlords must ensure that their paperwork is in order.
Where the EICR indicates that a private landlord is (or is potentially) in breach of the Regulations, the landlord must ensure that any required work is carried out by a qualified person within 28 days or the period specified in the EICR if shorter. The landlord must then obtain written confirmation that the work has been carried out and provide this to the tenant(s) and to the local housing authority (LHA).
What are the electrical safety standards?
As stated above, in addition to obtaining an EICR, landlords must ensure that the prescribed electrical safety standards are met during any period where the property is occupied pursuant to a specified tenancy. The Regulations define electrical safety standards as being those set out in the 18th edition of the Wiring Regulations (published as BS 7671:2018) which came into force on 1 January 2019. sLandlords should note that electrical installations that were installed before 1 January 2019 are very unlikely to comply with the 18th edition in every respect. This raises an obvious concern for landlords in relation to older installations as the Regulations simply state that those standards must be met during any period of occupation. However, this point is addressed in the government’s non-statutory guidance for landlords. The guidance stresses that the electrical installation should be safe for continued use. There are different classification codes for the EICR – the report could state ‘Improvement recommended’ which does not indicate that remedial work is required but simply means that improvement works are recommended. The guidance expressly states that it would be good practice to carry out this work but it is not required in order to comply with the Regulations.
How are the Regulations enforced?
The LHA is responsible for enforcing the regulations. LHAs can request a copy of the EICR (although practically they are only likely to do this if they have reason for concern) and landlords must then supply it within 7 days of the request. This is a short time frame and so landlords may wish to consider including wording in their leases to ensure the drafting includes a tenant obligation to notify the landlord on receipt of a statutory notice.
The LHA must serve a remedial notice if it has reasonable grounds to believe that a private landlord is in breach of its duties under the Regulations. This notice must specify the necessary remedial action and require the landlord to comply within 28 days (beginning with the date of service of the notice). However, landlords are entitled to make written representations and the notice will then be suspended until the LHA has considered these. Following this consideration, the LHA can either confirm or withdraw the remedial notice. In the event that it is confirmed, the landlord will then have 21 days (from the date on which the landlord is informed of this) to comply with the remedial notice.
Regulation 6 gives the LHA the power to arrange for an authorised person to enter the premises and carry out the required work. The LHA can do this if it is satisfied on the balance of probabilities that a landlord is in breach of its duty to comply with a remedial notice. Landlords have a right to appeal to the First-Tier Tribunal against the decision of the LHA to serve a remediation notice. The LHA must wait until the end of the landlord’s appeal notice period (which is 28 days beginning with the date of service of the LHA’s remediation notice) before commencing work.
In dangerous situations where the EICR indicates that urgent remedial action is required, the LHA has the power, pursuant to Regulation 10, to arrange for an authorised person to carry out the required works immediately – subject to giving not less than 48 hours’ notice to the tenant or tenants. Urgent remedial action is defined as action identified in a report as being immediately necessary in order to remove the danger present and risk of injury.
The Ministry of Housing, Communities and Local Government published an explanatory memorandum to the Regulations which notes that these enforcement obligations will place an additional burden on LHAs. It remains to be seen whether LHAs will have sufficient resources to enforce the Regulations effectively. However, the LHA can impose financial penalties (as explained below) and the Regulations provide that the LHA can apply the proceeds to meet the costs and expenses incurred in private rented sector enforcement generally.
What are the penalties for non-compliance?
The enforcement provisions in the Regulations include the imposition of financial penalties and remedial works led by the LHA. The LHA is entitled to recover its reasonable costs in arranging for remedial work to be carried out as a result of the landlord’s failure to do so (pursuant to the LHA’s powers under Regulations 6 & 10 explained above). Landlords have a right of appeal to the First Tier Tribunal against the recovery of such costs.
In addition, LHAs can impose a financial penalty of up to £30,000 where the LHA is satisfied beyond reasonable doubt that a private landlord has breached a duty under the Regulations. The LHA has discretion to determine the amount, up to that limit, and can issue more than one penalty in the event of a continuing failure.
The penalties under the Regulations are not currently linked to the valid service of a section 21 notice as is the case with certain gas safety obligations. The government had indicated that it might adopt that approach in its response to the 2018 consultation on this topic (Electrical safety in the private rented sector) but this was not included in the Regulations.
What about the impact of COVID-19?
The guidance for landlords on the Regulations states that landlords will not be in breach of their duties if they can show that they have taken reasonable steps to comply. The current government guidance on working in other people’s homes clearly states that no work should be carried out in a household which is isolating because a family member has symptoms – unless it is to remedy a direct risk to the safety of the household or to the public. A landlord could show reasonable steps by keeping copies of all communications that they have had with their tenants and with electricians as they tried to carry out the work, including any replies received.
How much will this cost?
The explanatory memorandum to the Regulations states that the average cost of five yearly electrical safety checks is estimated at £31 per year per property. They also estimate one-off familiarisation costs of £14 million in total for all landlords. This figure was estimated by assuming that it would take the average landlord just 30 minutes to read and understand that relevant legislation and guidance. However, there is likely to be significant variation across the sector depending on portfolio size and geographic location.
Action points for landlords
Responsible landlords will no doubt want their electrical installations to be safe in order to ensure tenant safety and help prevent fires. Landlords should consider the following in order to minimise the risk of non-compliance:
- Maintain accurate records - all attempts to communicate with tenant(s) and arrange any the electrical safety testing should be well-documented.
- Assess the nature of electrical installations at the property and review whether any incidental evidence may be produced to show the installation is in good condition.
- Ensure that where electrical safety testing is carried out, copies of the EICR are retained appropriately to ensure they can be made available to the next tenant or prospective tenant.
- Consider the terms included in any ASTs used to ensure the drafting includes a tenant obligation to notify the landlord on receipt of a statutory notice. This could be crucial where for example a landlord receives a written request at the property from the local authority to supply the EICR – a landlord will have just 7 days to comply.
This article was first published in Property Law Journal (lawjournals.co.uk) and was written by Laura Sheftel and Hayley Lalsing. For more information please contact Hayley at firstname.lastname@example.org.