New Minimum Energy Efficiency Standard (MEES) for Landlords

On April 1st 2018 new rules will come into place in England and Wales making it illegal for rented properties to fall below a new Minimum Energy Efficiency Standard (MEES). Following the legal introduction of Landlords needing to provide an Energy Performance Certificate (EPC) in October 2008, a minimum ‘E’ rating is now being introduced.

It is estimated that between a quarter to a third of properties are currently at risk of falling below this minimum. Upgrading properties in order to meet this standard can take a significant amount of time so our advice is to act now.

New builds have been subject to increasing energy efficiency standards over the years, but now these rules are falling hard on existing properties and it is time to keep up with them. As from 1st April 2018 it will be unlawful to grant a new lease to any domestic or commercial lets with an EPC rating below ‘E’. Property owners who sub-let part of their premises will also be affected.

In addition to this the Government have also highlighted that they would like to raise this standard to an energy rating D by 2025, and C by 2030 so Landlords need to prepare for this eventuality.

From 2020 and beyond MEES on all leases

By 2020 the Minimum Energy Efficiency Standard (MEES) will be applicable to all existing leases that are required to have an EPC, not just new leases. This is something that all Landlords need to be aware of and act now to avoid a rush to implement improvements later on.

Understanding where your properties currently fall short and what amendments need to be made will help you to schedule in maintenance and perhaps even implement changes bit by bit to make it more affordable.

Exceptions to the Minimum Energy Efficiency Standard rule

There are some exemptions to the MEES rules, such as:

• Listed or officially protected buildings where energy efficiency improvements would alter them unacceptably
• At an industrial site, workshop, or non-residential agricultural building that uses little energy
• If it is a temporary structure that is only due to be used for two years or less
• If the building is long-term vacant or due to be demolished

Those Landlords claiming an exemption will need to notify and provide evidence to a centralised register.

Penalties for MEES non-compliance

Penalties for non-compliance of the minimum standard will be high and will reflect both the severity and length of the non-compliancy up to a maximum of £150,000. In addition to this, non-compliant properties will also be subject to a decrease in rental value and loss of rental income.

Advice to Landlord’s moving forward

Landlords are advised to act now and commission an up-to-date Energy Performance Certificate which may have changed over time to understand the areas recommended for improvement. With the high penalties in place it will be important to show compliance by the scheduled dates.

Those Landlords with extensive portfolios would be advised to look at those bringing in their greatest income streams and renewal cycles and invest in these properties first. It is also important once work is carried out to review the sum you are insured for by getting a revised Landlord Insurance quote to avoid underinsurance in light of the upgrades.