Partner Katja Wigham, in our Commercial Property team, explains the Minimum Energy Efficiency Standards ('Mees') and How Landlords Should Prepare.
It is now just under one year until the MEES regime comes into effect. From 1 April 2018, landlords must not grant a new tenancy (or renewal) of a property with an Energy Efficiency Certificate (‘EPC’) rating of F or G, unless certain exemptions apply (and must not continue to let such property after 1 April 2023).
The Department for Business, Energy and Industrial Strategy has recently published guidance on the MEES aimed at landlords of non-domestic properties (with further guidance aimed at domestic properties to follow). This offers welcome clarification of the complex Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (‘the regulations’) and sets out the steps required to ensure compliance with the regulations.
In anticipation of 1 April 2018, we have set out below 5 of the key features of the MEES that all private landlords of non-domestic premises should be aware of.
- Application of the regulations.
The MEES only apply where there is an EPC for the property. There is no requirement within the regulations for landlords to obtain an EPC. Therefore, properties that do not need an EPC will not be affected by the regulations.
- An EPC rating of E is a minimum.
If you own F or G rated properties, you should consider what works (if any) might be required in order to achieve an E rating. Given that such works could be both costly and time consuming, you should consider taking expert advice on what cost-effective improvements could be made to improve the rating as against more substantial works which may deliver a longer term benefit.
- Exemptions are available.
One example being that consent to carry out the required energy efficiency improvements cannot be obtained (for example, from tenants or statutory authorities). Exemptions must be appropriately registered to be relied upon and will apply for a period of 5 years, after which time the landlord must comply or demonstrate a new exemption.
- Enforcement.
Local authorities will be responsible for enforcement, which may be in the form of either a financial penalty (of up to £150,000 per property) and/or a publication penalty (where the non-compliance is published). Landlords in receipt of a penalty notice can request a review and subsequently appeal against imposition of the penalty allocated.
- Future planning - consider reviewing lease provisions.
Landlords should consider whether or not to start including MEES provisions within leases as standard. For example, where a property does not require an EPC, the landlord may want to prevent the tenant from obtaining one to avoid triggering application of the regulations.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
