MEES Regulations have come into effect from 1st April 2020. Landlords are expected to take appropriate steps to comply with the requirements of the Minimum Energy Efficiency Standard (MEES) regulations. Since 1st April 2018. Landlords have not been permitted to lease out their property (be that a commercial or residential lease) if the property EPC rating is below an E, without remedial works to improve the rating, unless it falls within one of the permitted exceptions. If the property is a residential tenancy, the landlord was expected to invest £3,500 (inclusive of VAT) on the improvements. If that amount did not bring the rating above an E, the tenancy still complies.
From 1 April 2020, the government has extended these requirements to all new and existing tenancies.
What is an EPC?
EPCs are certificates which indicate how energy efficient a property is currently, and could be with improvements. The rating for the EPC is based on an assessment undertaken by an accredited domestic energy assessor. It is based on the ‘fabric’ of the building i.e construction and materials, and the services ( heating, ventilation and lighting). Each of the energy-efficient measures in place has been given the points – which results in an ‘SAP’ (standard assessment procedure) rating. This is then converted into an ‘EPC band’ or rating – ranging from A for the most efficient to G for the most inefficient.
EPCs are a legal requirement for buildings when constructed, let, or sold. Individual rooms let within an HMO do not require separate EPCs, but if the HMO itself has been let on a single tenancy or sold in the last 10 years, the building will require one.
MEES Regulations-Tenancy type
From 1 April 2020, the prohibition on letting properties with an EPC rating of F and G has been extended to cover all relevant properties, even where there has been no change of tenancy. Landlords with properties assessed at EPC F and G must now improve the property rating to E or register an exemption if they want to continue to let it.
Removal of cost exemption
The validity of all existing exemptions registered on the basis that the landlords could not get any funding for energy efficiency improvements will end for individual properties on 31 March 2020, instead of after five years. Landlords who had registered such exemptions prior to 1 April 2019 will have to make improvements (up to £3,500). They need to ensure their properties achieve EPC E by 1 April 2020 – unless they apply for a further exemption successfully.
New funding element
Since 1 April 2019, landlords of domestic properties with an EPC rating below E must carry out up to £3,500 worth of works improving their energy efficiency even if they cannot obtain third-party funding to meet the costs.
The £3,500 cap is an upper ceiling, not a target or a spend requirement. Landlords may spend more if they wish. If a landlord can improve their property to E (or higher) for less than £3,500. That means they will have met their obligation.
If the landlord cannot achieve an upgrade to EPC E for £3,500 or less?
The landlords must make all the improvements to make up to the cost limit first. Then register for an ‘all improvements made’ exemption.
The MEES Regulations refer to the concept of ‘relevant energy efficiency improvements’. So, that is a measure or package of measures, EPC report recommended. Landlords can purchase and install this package for £3,500 or less (including VAT) – the cost cap.
Landlords can install any energy efficiency measures. Their chosen measures should meet the government’s list of ‘recommended energy efficiency improvements’. However, if landlords fail to improve the property to EPC E, they cannot let the property or register an exemption.