Minimum Energy Efficiency Standards (MEES)
The minimum energy efficiency standard (MEES) was introduced in March 2015 by the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.
Commercial buildings have an energy efficiency rating ranging from A – G. F and G are the worst performing. The new law introduced a minimum standard of E, such that buildings cannot be rented out unless they meet that standard.
The application of this requirement is being introduced in phases:
- From 1 April 2018, landlords of buildings within the scope of the MEES Regulations must not renew existing tenancies or grant new tenancies if the building has less than the minimum energy performance certificate (EPC) rating of E
- After 1 April 2023, landlords must not continue to let any buildings which have an EPC rating of less than E
There are complex exemptions1 to both of these.
The penalty for renting out a property for a period of fewer than three months in breach of the MEES Regulations will be equivalent to 10% of the property’s rateable value, subject to a minimum penalty of £5,000 and a maximum of £50,000.
After three months, the penalty rises to 20% of the rateable value, with a minimum penalty of £10,000 and a maximum of £150,000.
Two sets of regulations (Energy Performance of Buildings (England and Wales) 2012 and the MEES Regulations) need to be considered when deciding if a building and tenancy is impacted.
Further detail can be found here
1Exemptions
- The ‘Golden Rule’: where an independent assessor determines that all relevant energy efficiency improvements have been made to the property or that improvements that could be made but have not been made would not pay for themselves through energy savings within seven years. There are numerous examples of “relevant” energy efficiency improvements which include double-glazing and pipework insulation which need to be considered; wall-insulation measures are not required where an expert determines that these would damage the fabric of the property.
- Devaluation: where an independent surveyor determines that the relevant energy efficiency improvements that could be made to the property are likely to reduce the market value of the property by more than 5%.
- Third Party Consent: where consent from persons such as a tenant, a superior landlord or planning authorities has been refused or has been given with conditions with which the landlord cannot reasonably comply.
Exemptions must be registered on the central government PRS Exemptions Register. The register was intended to go live in October 2016 but is now due on 1 April 2018.
The exemptions are valid for five years only and cannot be transferred to a new landlord.