Important changes to the MEES Regulations!
Posted on 8 April 2020 by Sasha Loveridge
As landlords will be aware, when a property is let a valid energy performance certificate (“EPC”) must be provided to the tenant.
The Minimum Energy Efficiency Standards (“the MEES Regulations”) state that it is unlawful for a landlord to let domestic property without a valid EPC with a minimum rating of E to new tenants or renewal tenants, unless that property is registered as an exemption. F and G rated properties are classed as “sub-standard” properties.
From 1 April 2020, the applicability of the MEES Regulation will expand - private landlords will be prohibited from letting sub-standard property and the MEES Regulations will apply to all tenancy agreements including existing tenancies, not just new or renewal tenancies.
Landlords of the draughtiest homes should have made changes to their sub-standard properties ahead of the new rules. However, the following options are available to landlords and should be considered as soon as possible if changes have not yet been made:-
- Make sufficient energy efficient improvements to ensure the property is no longer sub-standard;
- Make all relevant energy efficient improvements (as referred to in the EPC) to the property and if it continues to be sub-standard, register this information on the Private Rental Sector Exemptions Register (“PRS Exemptions Register”).
- If no energy efficient improvements to the property can be made, register this on the PRS Exemptions Register.
A landlord may be exempt from these regulations if one of the following exemptions applies:-
- The “all relevant improvements made exemption” – if, after all relevant improvements have been made, the EPC rating is still below E or there are no improvements that can be made.
- The “high cost exemption” – if the cost of carrying out the cheapest recommended improvement exceeds £3,500 (inclusive of VAT). This exemption can only be used where there are no improvements that can be made for £3,500 or less.
- The “consent exemption” – if a landlord cannot obtain the necessary third party consent (ie lender consent, tenant consent etc.) for the works.
- The “wall insulation exemption” – if the only improvements that can be made are to the wall insulation and written expert advice shows these measures would negatively impact the property.
- The “devaluation exemption” – the works would reduce the market value of the property by more than 5%.
- A “temporary exemption” – if a person “suddenly” becomes a landlord in a limited set of circumstances for example, a lease is deemed by operation of law to have been created. This exemption allows a grace period of six months for the landlord either to carry out improvements so the property is no longer sub-standard or to register a valid exemption. The relevant works must be carried out after the six months expires.
If a landlord breaches the MEES, they can find themselves facing enforcement action from the Local Authority which could lead to financial penalties and negative publicity. Tenants also have the ability to make a complaint to the Local Authority, requesting the landlord to carry out the relevant improvements.
It is therefore essential that landlords are proactive and take appropriate action in order to comply with the MEES Regulations by either improving the rating or obtaining an appropriate exemption. Furthermore, the Government is considering raising the EPC target to a D rating in a couple of years and so it is worth getting rental properties up to scratch now.