Minimum energy efficiency standards for rental homes - Justice and Community Safety Directorate

Minimum energy efficiency standards for rental homes


Information on minimum energy efficiency standards for rental homes

The ACT Government has introduced a regulation and explanatory statement under the Residential Tenancies Act 1997 to require all residential rental properties in the ACT to meet a new minimum energy efficiency standard for ceiling insulation.

Many renters in the ACT are living in poor quality housing that is expensive to heat or cool and doesn’t meet our community’s expectation around having a suitable home to help maintain health, comfort, security, and happiness.

The minimum energy efficiency standards for rental homes will help improve energy performance, increase thermal comfort, reduce greenhouse gas emissions, and contribute to climate change resilience.

Introducing a minimum energy efficiency standard for all residential rental properties in the ACT is an ACT Government commitment under the Parliamentary and Governing Agreement for the 10th Legislative Assembly.

This new standard commences from 1 April 2023, with a phase-in period extending to 30 November 2026. From 1 April 2023, landlords, are required to indicate whether their property meets the minimum standard in any rental advertisements and new lease agreements. Tenants will have the right to request and be provided by landlords with evidence on the property’s compliance.

Between 1 April 2023 and 30 November 2026, landlords will have nine months from when a new lease is signed for the property to comply with the standard. This will allow landlords adequate time to make the required changes in their properties and will stagger upgrades to avoid a demand spike on insulation and insulation installers.

A new exemption, in place from 1 January 2024, provides for a temporary exemption until 1 June 2024 to those landlords who have been unable to secure the services of a certified insulation installer. Any insulation installation in rental homes undertaken to meet the standard during this period must still comply with all the requirements under the regulation. See FAQ’s – General “Are there any exemptions available?” for more information.

Rental properties that have an existing lease which doesn’t get renewed before 30 November 2026, must nevertheless comply by the 30 November 2026.

After 30 November 2026, all properties entering the rental market have 3 months to comply with the standard (unless they have an exemption).

Why improve ceiling insulation?

Around half of the energy used in an average Canberra home is for heating and cooling. Up to 35 per cent of heat is lost through the ceiling over the colder months in an uninsulated Canberra house.

Installing effective insulation in houses reduces the amount of warmth escaping in winter and the amount of heat entering in summer. This ensures that houses are more comfortable, reducing heating and cooling bills and helping to reduce greenhouse gas emissions.

The higher the R-value (Thermal Resistance) of insulation the more it slows heat flow and the better it insulates. R5 is recommended for the ceiling and is the standard insulation level used in new builds.

A Regulatory Impact Statement undertaken in 2021 provided initial modelling and analysis exploring various options for an energy efficiency regulation. As part of this research, the introduction of a minimum ceiling insulation standard was found to be the most effective way to increase the energy efficiency of rental properties in the ACT.

Community consultation

In late 2021, ACT Government undertook community consultation on how to best roll-out this regulation. A Consultation Paper was released, workshops undertaken with key stakeholder organisations and two online surveys were available for landlords and renters to provide feedback.

Of those who completed the survey, 95% of renters and 59% of landlords were supportive of the standard.

To find out more about the community consultation and view the 2021 Listening Report, visit YourSay Conversations.

Fact sheets

Frequently asked questions - general

The standard requires rental homes with no insulation or existing ceiling insulation below an R-value of R2, to install or upgrade the ceiling insulation to a minimum R-value of R5.

Rental homes with ceiling insulation rated at R2 or above will not require any upgrades as they will already meet the minimum standard. It is estimated that over 60% of rental properties are already compliant with the standard.

The standard will apply to both private and public rental properties.

The minimum standard will come into effect from 1 April 2023, with a phase in period extending to 30 November 2026.

From 1 April 2023, properties will be required to comply with the minimum standard after a new lease is signed. The length of time that you will have to comply with the standard from signing a new lease will depend on whether the lease is signed before or after 1 December 2026.

  • From 1 April 2023: Rental providers are required to indicate whether their property meets the minimum standards in any rental advertisements and lease agreements.
  • From 1 April 2023 – 30 November 2026 (phase-in period): During the phase-in period, properties will need to comply with the minimum standard within nine months after signing a new lease. (If no new lease is signed in this period, then properties must nevertheless comply by 30 November 2026).
  • From 1 December 2026 (after the phase-in period): After the phase-in period, from 1 December 2026, any property entering the rental market has three months from the date a new lease is signed to comply with the minimum standard.

Landlords are responsible for making sure their property meets the minimum ceiling insulation standard and paying for any necessary upgrades or ensuring that they have a valid exemption for not meeting the standard.

In addition to the requirements of the minimum energy efficiency standard regulation, under the Residential Tenancies Act 1997 (ACT) (the Act), it is an offence if property owners:

  • fail to disclose if their property complies with, or is exempt from, the minimum standard in a rental advertisement or new lease for the property, or
  • make a false or misleading statement in rental advertisements about a key aspect of the property’s compliance with the minimum standard.

A penalty of up to $800 for individuals or up to $4050 for corporations may apply.

Under the Act, tenants may also apply to the ACT Civil & Administrative Tribunal (ACAT) for dispute resolution in circumstances including where:

  • a claim that the property meets the standard is disputed
  • an exemption is found to be based on a false or misleading statement, or
  • the property does not comply with the minimum standard within the designated time period.

If the property does not comply with the minimum standard within the designated time period, the tenant may apply for an order to:

  • end the tenancy
  • apply for a rent reduction for the period where the property was required to meet the minimum standard but did not, or
  • apply for compensation for any loss suffered by the tenant due to the property not meeting the minimum standard.

To ensure the safety of tenants and the community, the ACT Government under the regulation requires ceiling insulation installation to be undertaken by an ‘Approved Installer’ . This is a trained installer certified under the Energy Efficiency Council’s Professional Certifications Program.

To ensure all installations are safe and effective, while insulation is being installed there must be at least one certified insulation installer on-site with a certification under the Energy Efficiency Council’s Professional Certifications Framework. All other installers on site must have at least provisional certification under the Energy Efficiency Council’s Professional Certifications Framework.

Before any insulation upgrade is carried out, an electrical safety inspection of the roof space must be undertaken by a licensed electrician to ensure the safety of installers and to reduce the risk of post-installation fires or electrocution. Any electrical work required as a result of this inspection must be carried out before insulation is installed or upgraded.

Are there any exemptions available?

Yes, there are exemptions available for some properties. Some exemptions are permanent, and some are temporary.

Permanent exemptions apply for properties that are:

  • Heritage-listed and where installing insulation would compromise the heritage value.
  • Lower floor units in apartment complexes (as they are effectively insulated by the apartments above).
  • Dwellings where insulation cannot be feasibly installed due to physical constraints, such as roof design.
  • Dwellings where the cost of installing ceiling insulation is over $10,000 (although as much work as can be done for up to $10,000, must be undertaken if this applies, focusing on rooms that tenants will spend more time in, such as lounge/living rooms and bedrooms).

Temporary exemptions apply where:

  • The property is a top-floor unit of an apartment building, and the Owners Corporation refuses permission, or is in the process of arranging ceiling insulation to be installed collectively.
  • The property (or a substantial part of the property) is going to be demolished within 2 years of signing the lease. Tenants must be notified of this before signing the lease.
  • The property cannot be upgraded within the timeframe to comply due to inability to obtain the services of a certified installer to undertake the work. This exemption applies until 1 June 2024.
  • The tenant objects in writing to work to install or upgrade ceiling insulation being undertaken.
  • The tenant is the former owner of the property and is renting the property from the new owner on a temporary basis (for up to 12 months).

Once a temporary exemption stops applying, the property must meet the minimum standard:

  • within nine months if a temporary exemption stops applying to a property between 1 April 2023 and 30 November 2026, or
  • within three months if a temporary exemption stops applying to a property after 30 November 2026.

Frequently asked questions – landlords

Many rental properties, especially those built since 1997, will already meet the standard. It is estimated that over 60% of rental properties are already compliant with the proposed standard.

If your property has been built since 1997 and has insulation and it has not been significantly disturbed, then you may assume it meets the standard and a statutory declaration to this effect will suffice as evidence.

You may also check that your property is compliant by reviewing your property’s Energy Efficiency Rating (or EER). This usually includes the R-value of your property’s insulation and is provided with your property contract.

You can also estimate the R-value of installed insulation if you know the type and thickness of the insulation. For safety reasons though, you should not enter the roof space to determine this unless you have appropriate training.

If you believe your property’s insulation may have been disturbed or upgraded since the EER was undertaken, or you are unable to determine whether insulation meeting the standard is present, you can hire a trained building assessor to determine the level of insulation on your property.

Insulation installers can also inspect your ceiling insulation and determine the R-value of your existing ceiling insulation.

Yes, and tenants must be provided with evidence of compliance if they request it.

From 1 April 2023, landlords or property managers must disclose whether the rental property meets the standard or has a valid exemption when advertising a property for rent and when entering the lease agreement.

If an exemption applies or if the property does not meet the standard, the reason for the exemption or the reason the property does not meet the standard must also be disclosed when entering the lease agreement but is not required to be disclosed in the advertisement.

Potential tenants must be allowed time to consider information about whether the dwelling meets or does not meet the standard before signing the lease.

Tenants have the right to request and be provided with evidence that the property meets the minimum standard or if it has a valid exemption.

It is the landlords' responsibility to have the required documentary evidence that shows if their rental property meets the minimum standard or has a valid exemption.

Documentary evidence must be maintained to show that the property complies with the minimum standard, and must be provided on request to the tenant (or other person authorised by the ACT Government).

There are many different types of documents that can be relied on for this, including:

  • an inspection report from an insulation installer
  • an Energy Efficiency Rating report from a building assessor
  • a receipt for insulation installation services that includes the R-value of the ceiling insulation
  • if the property was built in 1997 or afterwards, a statutory declaration that there is insulation, and it has not been significantly disturbed, or
  • a statutory declaration that ceiling insulation with an R-value of R2 or more has been installed.

Yes, it is a requirement under the Act that you maintain documentary evidence to support your exemption. This can take a range of forms including a statutory declaration.

Certain exemptions have specific evidence requirements:

  • Cost of complying is over $10,000: If the property has an exemption because the cost of complying with the minimum standard will be more than $10,000, the regulation requires you to have a quote from a certified insulation installer and/or licensed electrician that shows this.
  • Demolishing all or a substantial part of property within two years: If you intend to demolish all or a substantial part of your property you must tell your tenant in writing before entering into the lease agreement.

Under the regulation you must keep a statutory declaration signed by you, declaring that you intend to demolish all or a substantial part of the property within two years of signing the lease agreement.

  • Tenant objects in writing to the work of installing or upgrading ceiling insulation being undertaken: You must keep a record of your tenant’s written objection to ceiling insulation being installed.
  • Top-floor apartment and the Owners’ Corporation refuses permission or is arranging for ceiling insulation to be installed collectively: You must have written confirmation from the Owners’ Corporation for the building or a copy of official minutes that it either:
    • intends to arrange for ceiling insulation to be installed collectively in the building and this includes in the ceiling above your apartment, or
    • refuses permission for you to install ceiling insulation above your apartment.

You do not need to apply for an exemption, but you do need to maintain documentary evidence that substantiates the exemption.

Compliance and enforcement mechanisms are contained in the Residential Tenancies Act 1997 (ACT). Under the Act it is a criminal offence to make a false or misleading statement in your rental advertisement about a key aspect of the property’s compliance with the minimum standard.

If such a false or misleading statement is made, the Act also allows your tenant to apply to ACAT to terminate the lease, or to seek a rent reduction for the period the property did not comply and/ or for financial compensation for any loss they have suffered as a result of the property not complying with the minimum standard.

To find a certified installer, visit the Energy Efficiency Council website.

To support increasing demand for insulation upgrades, the ACT Government is working with training organisations, including CIT and the Master Builders Association, to provide training for insulation installers to receive certification.

This is required for the safety of tenants, insulation installers and to protect your property.

The electrical safety inspection undertaken by a licenced electrician will reduce the risk of fire and installer electrocution.

The electrician will inspect the property to check:

  • for unsafe wiring in the roof space or wiring that is rated incorrectly
  • if installation of insulation will lead to any electrical wiring or circuits being materially adversely affected
  • whether a Residual Current Device (RCD) needs to be installed in the relevant circuit, and
  • whether any light fixtures need to be replaced.

Your electrician should provide you with a Required Electrical Work Report, noting any issues and electrical works that must be  completed before insulation can be installed or upgraded.

You must engage the electrician, or another licenced electrician, to undertake the required work, Once the required work is completed, the electrician will provide you and the approved insulation installer undertaking the work with a Completed Electrical Work Report. Whether or not work needs to be done, Access Canberra require the electrician to submit a Certificate of Electrical Safety (CES), and you should also request a copy to keep as a record.

Under the regulation, if there are halogen or other incandescent downlights in an area where ceiling insulation is required to be installed under the minimum standard, they must be removed and replaced with IC-4 rated LED downlights by a licensed electrician. This is because halogen and other incandescent downlights generate a lot of heat, and if insulation covers them this creates a fire risk.

Your electrician must also install a Residual Current Device/s (RCDS/s), if not already present, on all circuits impacted by the installer or upgrade of the insulation.

You will need to maintain copies of the Required Electrical Work Report, and if work is undertaken, copies of the Completed Electrical Work Report, and invoices as evidence that the safety check has been done and any necessary work completed. You should also request a copy of the CES that the electrician will submit to Access Canberra.

The insulation installer can organise for an electrical inspection or alternatively you can contact a licensed electrician to undertake the inspection. You will need to ensure that the electrician completes a Required Electrical Work Report and, if any electrical work is undertaken, a Completed Electrical Work Report. Whether or not any work is undertaken, Access Canberra require the electrician to submit a Certificate of Electrical Safety (CES).

A Required Electrical Work Report (and Completed Electrical Work Report if work is necessary), along with invoices for ay work undertaken, need to be kept as documentary evidence. You should also ask for a copy of the CES to be sent to you for your records.

All insulation installers and licensed electricians must have current asbestos awareness training.

If they inspect your property and suspect that asbestos is present, they will notify you. You must then engage a licensed asbestos assessor to verify if asbestos is present or not. A list of licensed asbestos assessors in the ACT can be found on the Work Safe website.

If the licensed asbestos assessor identifies asbestos in your property, then a licensed asbestos removalist will need to be contracted to remove the asbestos. A list of licensed asbestos removalists can also be found on the Work Safe website. 

No insulation or electrical work can be done until the asbestos is removed by a licensed asbestos removalist and a licensed asbestos assessor issues a clearance certificate.

The minimum standard requires that if there is no ceiling insulation or the level of ceiling insulation in your property is below R2, you will need to install or upgrade the insulation to a minimum R-value of R5. This will ensure that, if the requirement is at a future date raised above R2 no further work will be required by properties that have already been required to install or upgrade. Your certified insulation installer will also be able to advise you of the most suitable product.

Under the regulation all insulation products will need to meet the relevant Australian Standards and national codes of practice that cover the installation of ceiling insulation products. Check with your installer that they are using insulation that meets Australian standards. All insulation materials that are sold in Australia must meet Australian Standard AS/NZS 4859, Materials for the thermal insulation of buildings.

The Australian Government Your Home website includes links to websites which provide environmental comparisons of different insulation products as well as general information on insulation and R values.

You can also find out more about insulation and draft proofing at Everyday Climate Choices website.

Requiring rental homes with less than R2 ceiling insulation to upgrade to a minimum of R5 ceiling insulation was identified as the best option for a minimum energy efficiency standard for rental properties based on modelling undertaken by the ACT Government.

R5 is the level of ceiling insulation typically used in new builds and is considered a cost-effective option in the Canberra climate.

A certified insulation installer will be able to advise you if it’s safe to top up existing insulation or if replacement is required.

Topping up of existing insulation will depend on whether it is safe to do so, the quality of the material, the extent of damage and or compression of the product installed.

The regulation does not allow loose fill cellulose-based or foil insulation to be topped up or installed.

Given that insulation can degrade and lose its effectiveness as it settles and compacts over time, a thorough visual inspection is recommended to determine the current level and quality of any existing insulation.

Under the regulation all insulation products will need to comply with relevant Australian standards and national codes of practice that cover the installation of ceiling insulation products.

Insulation needs to be installed in ceiling spaces above all living areas of the property, or to at least 95% of these living areas that can be safely accessed by an insulation installer.

Ceiling insulation does not need to be installed in outdoor or non-living areas of the property such as a garage, shed, greenhouse, or the like.

The cost of insulation upgrades will vary depending on the property and the amount of work required.

Many rental properties, especially those built since the late 1990s, will already meet the standard so there will be no cost to them. It is estimated that around 60% of rental properties are already compliant with the proposed standard.

Yes, there is assistance available to help landlords manage the costs of implementing the minimum standard.

Support for rental providers to upgrade your property to meet the standard is available through the Sustainable Household Scheme (the Scheme).

Private landlords who meet the eligibility criteria under the Scheme will be able to access zero interest loans of up to $15,000.

Under the Home Energy Support Scheme (HESP), rebates for the cost of insulation upgrades will be provided to not-for-profit community housing providers and for landlords registered under the Community Land Tax Exemption Scheme.

The Residential Tenancies Act 1997 allows a landlord to access the premises at any time where the tenant agrees to this.  However, if the tenant does not agree to provide access, a temporary exemption from the standard is available if your tenant objects in writing to ceiling insulation being installed. You must keep evidence of your tenant’s written objection to use this temporary exemption.

However, if you still want to ensure the premises complies with the standards, recent amendments to the Residential Tenancies Act 1997 (ACT) expand the right of landlords to access their properties to include accessing the property to ensure it complies with the minimum standard.

The amendments also allow you to inspect your property to assess whether it meets the minimum standard and to undertake any required work.

This includes being able to access the property for a licensed electrician and a certified insulation installer to inspect the property and undertake any required work.

Under the amendments, before you do this, you are required to provide your tenant with 1 week notice and ensure you enter the property at a reasonable time with regard to the interests of both you and your tenant. This access cannot occur on Sundays, on Public Holidays or before 8:00am or after 6:00PM unless the tenant consents to access at these times.

Information for renters

The introduction of a minimum energy efficiency standard for rental homes will save renters money on energy bills and improve home comfort.

The standard is being introduced to ensure that all Canberrans, regardless of financial means, have a home that supports good health, comfort, security, and happiness.

See our Factsheet for key information on what renters need to know.

From 1 April 2023, your rental provider must give you information about whether or not a property meets the standard or has a valid exemption when entering a new lease. You should be given a reasonable amount of time to consider this information before signing the lease.

Under the regulation from 1 April 2023 rental providers need to disclose whether a rental property meets the standard or not or has a valid exemption on any advertising materials and new lease agreements.

If an exemption applies, the reason for the exemption must also be disclosed in the lease agreement but is not required to be disclosed in the advertisement.

You will be entitled to request and be provided with evidence that the property meets the standard or has a valid exemption.

No. The ACT Government under the regulation requires that only insulation installers certified through the Energy Efficiency Council can install ceiling insulation.

The Residential Tenancies Act (the Act) sets out rules for how often your rent can be increased and by how much.  The rules differ depending on whether you are in a fixed term tenancy or a periodic tenancy (sometimes referred to as ‘month-to-moth’ lease). For more information on these rules in the Act, visit the Renting Book and refer to the section on rent increases.

In fixed term tenancies, the rent cannot be increased during the fixed term unless the amount of the increase or the method for calculating the increase was included in the original tenancy agreement. This will mean you will know, in advance of signing your agreement what rent increases you can expect.

In periodic tenancies rent can only be increased 12 months after the tenancy commenced or at 12-month intervals from the previous rent increase. The Act also sets out a prescribed amount for rent increases (the percentage increase in the rents component of CPI since the last rent increase plus 10% of that amount) and provides that your rent must not be increased above the prescribed amount unless you agree to the proposed increase, or your rental provider has obtained an order from the ACT Civil and Administrative Tribunal (ACAT) permitting the increase.  ACAT can allow an increase above the prescribed amount where it is ‘not excessive’ (the rental provider will need to convince ACAT of this).

Before a rent increase can occur, your rental provider must give you 8 weeks’ notice in writing to their tenant. The notice must state the amount of the proposed increase, whether the proposed increase is more than the prescribed amount and, if so, that your rental provider will seek the ACAT’s approval before the increase takes effect.

Even if the proposed increase is less than the prescribed amount, you can still challenge a rent increase at ACAT if you want to. To successfully challenge an increase, you will need to convince ACAT the proposed increase is excessive.

The modelling undertaken for the Regulatory Impact Statement (RIS) found that even if rents were raised due to the cost of upgrading insulation, tenants would still benefit overall from reduced energy costs.

Yes. There are a range of measures to ensure ceiling insulation is installed safely, including the ACT Government requirement under the regulation that ceiling insulation only be installed by certified insulation installers.

To prevent electrical or fire risks, licensed electricians must complete an electrical safety check before the insulation is installed and complete a certificate of electrical safety if they identify any issues and need to complete any electrical work.

These requirements are required by the regulation to ensure the safety of tenants, installers and the property.

Different documents can be used as evidence. These include:

  • a receipt for insulation installation services that includes the R-value of the ceiling insulation
  • an inspection report from an insulation installer
  • an Energy Efficiency Rating report from a building assessor
  • if the property was built in 1997 or afterwards, a statutory declaration that there is insulation and it has not been disturbed.
  • a statutory declaration that ceiling insulation with an R-value of R2 or more has been installed.

No. You should not be required to move out of the property. Installation or upgrade of ceiling insulation should be able to be carried out during normal working hours, generally in less than a day. However, you will need to provide access to the rental property to allow this to occur.

You should only be required to move out if asbestos is identified or serious electrical or other safety issues are found that require substantial work to be undertaken.

In order for your rental provider to comply with the minimum standard they may need to access to your home to do an electrical inspection or to check whether any existing insulation meets the required standard. They may also need access so that any required work can be undertaken to ensure your home complies with the minimum standard. Under the Residential Tenancies Act 1997 (the Act) you can consent to providing access at any time. However, if you have an objection to ceiling insulation being installed, you can provide this in writing to your rental provider and this will give them grounds for a temporary exemption from the minimum standard.

Under proposed amendments to the Residential Tenancies Act 1997, your rental provider will be allowed to access the property (at a reasonable time) to ensure it complies with the minimum standard if they give you one week’s notice. This access will not be permitted on Sundays, Public Holidays or before 8:00am or after 6:00pm unless you agree to access at these times.

The minimum standard does not include draught proofing measures.

However, the ACT Government’s Renters Home Energy Program can help with draught-proofing and other energy efficiency measures for your home. The program provides an online home energy assessment tool as well as free and tailored advice for renters either in-person, over the phone or via email.

Low-income households can access help to draught-proof their home through the Low-Income Household Program currently delivered by St Vincent de Paul.

Resources

Tenants Advice Service (A division of Legal Aid ACT)

The Tenancy Advice Service ACT (operated by Legal Aid ACT) is funded by the ACT Government to provide free and confidential legal advice to tenants. For more information, and a range of online resources for tenants, see: https://www.legalaidact.org.au/tasact or contact 1300 402 512 or TAS@legalaidact.org.au.

Canberra Community Law

If you are a tenant in public housing (from Housing ACT), crisis accommodation or social housing (provided by a community housing provider), or if you want to find out if you are eligible for these services, the Housing Law service at Canberra Community Law can provide you with free and confidential legal advice. For more information, and a range of online resources for public housing tenants, see: https://www.canberracommunitylaw.org.au/

You can contact them on (02) 6218 7900 or info@canberrcommunitylaw.org.au

Law Society of the ACT

Connects individuals and organisations with the legal profession and provides information fact sheets to assist understanding of the law.

ACT Civil and Administrative Tribunal (ACAT)

More information about the ACT Civil and Administrative Tribunal is available at www.acat.act.gov.au. The Tribunal does not give legal advice but can provide information about its processes. The Tribunal can be contacted on (02) 6207 1740 or tribunal@act.gov.au.

Legislation

The Residential Tenancies Act 1997 and the Residential Tenancies Regulation 1998 are available on the ACT Legislation Register at www.legislation.act.gov.au.