Renewable Energy: Opportunities and considerations
The MEES Regulations - Energy efficiency in Private Rented Property
What are the MEES Regulations?
The Minimum Energy Efficiency Standard (MEES) Regulations introduce the government’s measures to improve energy efficiency in both domestic and non-domestic private rented property in England and Wales. They were introduced to combat those properties that waste energy, contribute to greenhouse gas emissions and impose unnecessary cost on tenants and the wider economy.
How do I know if my property is compliant?
When renting a property to a tenant, a landlord will often be required to provide an EPC showing the energy performance of the property.
From 1 April 2018, a landlord will be prohibited from granting a new tenancy, or renewing an existing tenancy, of a domestic or commercial property if it has an EPC rating of F or G (a sub-standard property) unless an exemption applies.
The Regulations go further, and from 1 April 2020 they will apply to all sub-standard domestic private rented property where there is a lease in place and from 1 April 2023, to all sub-standard non-domestic private rented property where there is a lease in place, again, unless an exemption applies.
The exemption criteria
It is important to note that any exemptions claimed by a landlord may not pass over to a new owner or landlord upon sale or other transfer of that property. The new owner will have to either meet the minimum standard or register an exemption themselves (if one applies).
The exemptions are there only to provide a backup if a landlord is unable to comply with the required standards asked of them.
Where a landlord believes that an F or G EPC rated property they rent qualifies for an exemption from the minimum energy efficiency standard, an exemption must be registered on the Register.
The exemption criteria are as follows:
- Where all ‘relevant energy efficiency improvements’ for the property have been made (or there are none that can be made) and the property remains sub-standard.
- The cost of purchasing and installing a ‘relevant energy efficiency improvement’ cannot be wholly financed at no cost to the landlord.
- Where certain types of wall insulation cannot, or should not, be installed.
- Where the consent of a third party is needed but cannot be obtained.
- Where the installation of any energy efficiency measures would devalue the property by more than 5%.
- Where the landlord has only recently acquired the property.
Are Grade 1 or Grade 2 listed buildings automatically exempt?
No, listed buildings are not automatically exempt. However, listed buildings required to have an EPC may also be required to comply with MEES.
For example, certain improvements may legally require third party consent before they can be installed in a property. A landlord may let a sub-standard property where they can demonstrate that they have been unable to improve the energy efficiency rating because they could not obtain one or more necessary consents (the third party consent exemption).
The MEES Regulations place a burden on landlords to maintain their properties within the required standards and bring those properties that fall below the minimum level up to scratch.
The exemptions can be applied in some instances but they should be used as a backup to performing the recommendations, not as a starting point.
For further guidance and support with MEES regulations contact our Commercial Property team.
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