MEES only applies to properties with a valid EPC. Certain exemptions also apply. Landlords are exempt from implementing identified energy efficiency improvements where they can evidence that:
- Wall insulation improvements will damage the fabric/ structure of the property
- They are not cost-effective i.e. the works do not meet the “seven year payback” rule, or cannot be wholly financed under the Green Deal
- The Landlord cannot obtain all necessary consents to implement them (e.g. from tenants, lenders, planning authorities etc)
- They will reduce a property’s market value by 5% or more
imaco recommends:
- Reviewing existing property portfolios with immediate effect, to identify problem properties (i.e. those with EPC ratings below E)
- Planning and scheduling improvement works
- Considering voluntarily obtaining EPCs for properties where these do not exist and are not legally required
- Considering bespoke wording in leases (to enable improvement works and potentially pass on upgrade costs)
- Considering wider consequences of breach of the rules (e.g. breach of banking/loan covenants and reputation risk).
Minimum Energy Efficiency Standards (MEES)
MEES does not apply to lettings to new tenants with a fixed term of not more than six months or to fixed term leases of 99 years or more.
Enforcement and penalties
- Local authorities will enforce the provisions via Trading Standards Officers.
- Where a local authority suspects that a landlord with a property in scope of the regulations is not compliant, or has not sufficiently proved an exemption, the local authority can serve a compliance notice on the landlord requesting further information it considers necessary to confirm compliance. If this is not provided, or is provided and is not sufficient to prove compliance, the local authority may proceed to issuing a penalty notice.
- The penalty regime for non-compliance with the regulations will reflect the degree of infringement, and length of noncompliance. In some cases the infringement will be made public to encourage compliance. Penalties may be cumulative.
The Energy Act 2011 places a duty on the Secretary of State to bring into force regulations to improve the energy efficiency of buildings in domestic and non-domestic private rented sectors in England and Wales. The regulation, known as Minimum Energy Efficiency Standards (MEES), must be in force by 1st April 2018 and will tackle the very least energy efficient properties - those rated F or G on their Energy Performance Certificate (EPC) and would make them unlawful to let.
Certain properties are not included in the scope:
- Low energy demand warehouses and industrial buildings
- Buildings that are to be demolished
- Certain protected buildings (e.g. listed buildings) where changes would unacceptably alter their character or appearance