A guide to the Minimum Energy Efficiency Standards (MEES)
From 1st April 2018 a new minimum standard for energy efficiency will apply to private rented properties. It will be unlawful to grant a new tenancy for a domestic property or lease for a commercial property with an Energy Performance Certificate (EPC) rating of F or G. The regulations will also include lease renewals.
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- Assess your property
- Identify any buildings at risk
- Implement strategy to ensure your buildings comply with the regulations
- Advise upon the most cost effective options
Which buildings and tenancies does MEES apply to?
All domestic and non-domestic properties for which an EPC is required. Only a handful of properties will fall outside the regulations, for example:
- Small standalone buildings - under 50m2.
- Places of worship.
- Buildings with no heating or cooling.
- Temporary properties.
- A tenancy of less than 6 months (with no right of renewal) and tenancies over 99 years.
What are the exemptions?
- The Seven Year Payback Test – Where relevant energy efficiency improvements will only be required if they achieve a payback within seven years. Where a landlord is intending to rely upon this they will need to produce evidence in the form of three separate quotes.
- Devaluation – Where an independent surveyor determines the relevant energy efficiency improvements that could be made to the property are likely to reduce the market value by more than 5%.
- Third Party Consent – Where consent from persons such as a tenant or relevant third party is not granted.
- If all cost effective energy improvements have been completed and the property is still below an E rating.
The above exemptions will only grant a landlord temporary immunity for a period of five years (and cannot be transferred to a new landlord). The building must be entered on the Exemptions Register which will be a public accessible document. After five years, the landlord must try again to improve the property’s EPC rating to meet the minimum level of energy efficiency.
What are the penalties of non-compliance?
The MEES regulations will be enforced by Trading Standards. They will have powers to impose civil penalties that are set in reference to the length of breach and the property’s rateable value.
- Breach less than 3 months – 10% of rateable value (minimum penalty of £5,000 and maximum of £50,000).
- Breach over 3 months – 20% of rateable value (minimum penalty of £10,000 and a maximum of £150,000).
Fines can also be applied if a landlord is publishing false or misleading information on the Exemptions Register or failed to adhere to a compliance notice.
Existing Tenancy or Lease
Legislation also states it will be unlawful to continue any existing tenancy or lease for F and G rated buildings:
- After 1st April 2020 for a domestic property.
- After 1st April 2023 for a commercial property.
The Government has published detailed guidance for non-domestic dwellings to help landlords, investors and lenders to prepare for the new legislation. The clock is ticking to implementation of the MEES Regulations on 1st April 2018 and we urge all parties to obtain the correct advice to help them prepare for the forthcoming changes.