THE NEW RULES FOR THE ‘MINIMUM LEVEL OF ENERGY EFFICIENCY’ STANDARD (MEES) – ENGLAND AND WALES
As from April 2018, new tenancies in England and Wales have had to meet the Government’s minimum energy efficiency standard (MEES). Properties required to have an energy performance certificate (EPC) must reach a minimum ‘E’ rating on their EPC assessment, or have a valid exemption registered.
On 1 April 2020 the new rules for the ‘Minimum Level of Energy Efficiency’ came into force extending this requirement to all existing tenancies.
The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 as amended by The Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2016 and The Energy Efficiency (Private Rented Property) (Amendment) Regulations 2019 enforces the standard minimum energy efficient rating of ‘E’ and above.
WHAT IS AN EPC?
EPC’s are a legal requirement for buildings when constructed, let, or sold. Separate EPC’s are not required for individual rooms let within a HMO however, if the HMO itself has been let on a single tenancy or sold within the last 10 years, the building will require one.
An EPC certificate indicated how energy efficient a property currently is, and could be with improvements. An accredited domestic energy assessor will undertake an assessment providing the rating for the EPC. The assessment will be based on the ‘fabric’ of the building i.e. how it is constructed and materials, And the services’ e.g. heating, ventilation and lighting. Points will be given for each of the energy efficient measures in place, which results in a ‘SAP’ (standard assessment procedure) rating. This is then converted into an ‘EPC band’ or rating which ranges from A being the most efficient to G the most inefficient.
WHO DO THE RULES APPLY TO?
On 1 April 2020 the new regulations will apply to all domestic private rented properties that are:
- Let on specific types of tenancy agreement such as assured shorthold or fully assured tenancies, regulated tenancies or domestic agricultural tenancies; and
- Legally required to have an Energy Performance Certificate (EPC)
WHAT IS THE PURPOSE OF THE NEW REGULATIONS?
The Government is introducing a minimum band E rating for properties let in England and Wales. Landlords must pay up to £3,500 per property to improve any properties currently rated F or G, known as the ‘MEES cost cap’.
ACTION FOR LANDLORDS
If you are a landlord and your rental property has an EPC rating of ‘F’ or ‘G’, you must take appropriate steps to comply with the requirements of the MEES Regulations. You must improve the property rating to an E immediately or register an exemption if you wish to continue to let it.
Information regarding how to improve energy efficiency will be included in the most recent EPC report. This will include a list of recommendations detailing measures which should improve the energy efficiency.
In some circumstances landlords will be required to spend up to £3,500 on energy efficiency improvements if they wish to register an exemption.
WHAT IF THE COST OF IMPROVING TO AN ‘E’ IS HIGHER THAN £3,500?
If the cost for reaching an E rating is higher than £3,500 landlords will need to register an exemption. This will be either:
- A ‘high cost exemption’ if the cost of installing the cheapest recommended improvement is higher; or
- The ‘all improvements made exemption’ if any improvements up to the value of £3,500 have been made but the property remains rated ‘F’ or ‘G’.
Each exemption is valid for a maximum of five years. The PRS Exemption Register is held by the Government. When registering, landlords must upload evidence of the exemption cited.
TENANTS REFUSING ACCESS FOR IMPROVEMENT WORKS/OR FREEHOLDER LANDLORD REFUSING TO GIVE CONSENT
If tenants are refusing access to the premises, or if the landlord owns a leasehold property and the freeholder landlord is refusing consent, landlords are able to register a ‘consent exemption’ which will be valid for five years.
However, if the tenant who refused to give access laves the property, the exemption will no longer be valid and the landlord will need to meet the requirements before letting the property again.
EPC EXPIRED AND THE PROPERTY HAS NOT BEEN RE-LET
If the EPC has expired and the property has not been re-let since then technically it does not have to have an EPC rating at all. If the property no longer required an EPC then the landlord is neither required to meet the minimum standard nor to register an exemption, as no rating exists.
However, if plans are made to re-let the property, landlords will need to meet the minimum standard before doing so.
It will be unlawful to rent a property which breaches the requirement for a minimum E rating, unless there is an applicable exemption.
Civil penalties of up to £2,000 for a breach of less than 3 months’ duration and £4,000 for breaches of more than 3 months may be imposed for domestic property.
A landlord who has registered false or misleading information on the PRS Exemptions Register may be served with a penalty notice imposing a financial penalty for so doing, up to a maximum of £1000 for domestic property.