June 2020 saw a slight easing of lockdown restrictions but a tightening of electrical safety standards for landlords. In this article, Eddie Ryan, Senior Account Handler and broker partner to many of County’s landlords, write his thoughts on the new legislation
While many of our landlords have adapted to the challenges this year has presented, it might feel like that they are having a double-whammy with the additional requirements set out in the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020.
Previously it was a regular practice for property owners who rent through an agent to have these electrical inspections done. A number of independent landlords also did too. This fulfilled their general duty of care to tenants. Since June, it is now a legal requirement for electrical inspection condition report (EICR) to take place on private rented properties in intervals no more than 5 years apart.
In contrast, commercial properties only have a common law duty to ensure the premises are safe. The Electrical Safety Council recommends that electrical systems are tested every 5 years or on change of tenancy, whichever is sooner. This is the case if the commercial property is used for office space, commercial or industrial use or even just storage.
Ultimately these tests are a risk management tool to help safeguard your business from electrical fires.
While fires are primarily considered an issue for the landlord, the liability exposure is often a great risk. A building maybe £200,000 to replace but if a tenant loses their home or possessions or worse still and it’s down to faulty wiring then costs for the landlord can stretch into the millions of pounds.
To conduct a check, the electrician must be qualified and competent; while they don’t need to belong to a particular trade association, they should have recognised industry standard qualifications or have completed a recognised apprenticeship.
Older electrical systems which don’t comply with the 18th Edition of IET Wiring Regulations or that require significant rewiring will fail inspections until they are remedied. This and other errors will be categorised as:
- Code 1 (C1): Danger present. Risk of injury. The electrical inspector here may carry out emergency repairs to ensure safety before leaving the inspection.
- Code 2 (C2): Potentially dangerous.
- Further Investigation (FI): Further investigation required without delay.
- Code 3 (C3): Improvement recommended.
While a C3 will require improvement over time it won’t prevent a Pass for the inspection. For any other fault or error codes this will deem the inspection a failure and require a re-test when work is carried out. Landlords will have 28 days to comply with this.
Things that inspectors will look out for include:
- If there is any defective or missing earthing or bonding in the wiring
- Electrical points that appear over used or over loaded
- Other hazards that could lead to fire or shock
- Damaged, defective or any other dangerous electrical work.
Insurers will expect all landlords to comply with the new legislation. New tenancies from June 2020 have to have one at the beginning of the tenancy and for all existing private rented property tenancies April 2021 onwards. Put simply – no certificate means no valid claims.
A number of clients will have residential properties that are let to family members, employees, former employees and more. If you have a tenancy agreement in place with a term of less than 7 years then you will need an EICR. Irrespective of tenancies being low or no rent you will still require an EICR in line with the new regulations.
There are very few exceptions for the requirement on residential properties. Exemptions include scenarios where tenancy agreements are over 7 years in length, second homes and/or holiday homes that are only used by the home owner or their family for private enjoyment, student halls of residences and refuges.
The best course of action is to review the gov.uk website which outlines the new legislation and get in touch with your letting agent/managing agent to find out more. Alternatively, you can call your legal expenses, directors & officer and/management liability advice line for more information. Otherwise please get in touch with your regular insurance contact at County who will be able to assist you.
In summary for the majority of properties that have third parties inside them, on a private rental basis, then EICRs are a legal requirement. For commercial properties EICRs are strongly recommended.
