In April 2018, the Minimum Energy Efficiency Standards (MEES) came into force in England and Wales. These regulations apply to both domestic and non-domestic rented properties, plus mixed-use developments, comprising both residential and commercial premises.
Under MEES, it is now illegal for a landlord to let or renew a lease on a residential or commercial property if the Energy Performance Certificate (EPC) score falls below an ‘E’ rating. An EPC, which is required whenever a property is built, sold or rented, both rates a property in terms of its energy efficiency and provides recommendations on how to reduce energy usage. The sliding scale runs from A to G, where ‘A’ is the optimum efficiency level and ‘G’ the least energy efficient. The EPC is valid for 10 years.
These standards were introduced by the Government as a measure towards reducing energy waste and greenhouse gas emissions, plus lowering unnecessary costs for tenants.
From 1 April 2018 the regulations became enforceable upon the granting of a new lease and for the renewal of existing leases. From 1 April 2023, MEES will be extended to cover all leases, including where a lease is already in place. This also applies to sublet properties.
Where a property does not comply with the minimum standards, landlords must make the necessary alterations to the property to ensure compliance with MEES. Rather than having to finance improvements solely themselves, landlords can seek to use third party resources, such as the Green Deal.
Some properties are excluded from MEES, such as those which are due to be demolished or those used as places of worship. Additionally, the regulations don’t apply to lettings of six months or less, or lettings of 99 years or more. Where a premise is a listed building, the property may be exempt if any improvement works would alter the building’s character. However, it’s recommended to seek advice from the local authority conservation officer.
The regulations are enforced by the Trading Standards Officers and penalties will be based on the rateable value of the property, up to a maximum fine of £150,000:
Where a breach has lasted for less than 3 months: up to £5,000 or (if greater) 10% of rateable value, with a maximum penalty of £50,000.
Where a breach has lasted for 3 months or more: up to £10,000 or (if greater) 10% of rateable value, with a maximum penalty of £150,000.
Where a breach has lasted for less than 3 months: up to £2,000.
Where a breach has lasted for 3 months or more: up to £4,000 per breach.
Source: Allianz Insurance plc