As of 1st April 2018, it is required by law than any properties which are let within the private rented sector must usually have a minimum energy performance rating of E or above on their Energy Performance Certificate (EPC). Known as the Minimum Energy Efficiency Standards (MEES) the law will apply to all new tenancies granted after the implantation date. This is now a real focus for landlords with long term tenants in situ, as the regulations will apply to all existing tenancies as of 1st April 2020, meaning that properties which do not meet the minimum requirements will no longer be able to be let – even to an existing tenant.
While there are several exceptions, for the majority of landlords, this effectively means that they will no longer be able to let a property with a rating of G or F.
2019 Updates to MEES
Following amendments to the MEES regulations, as of 1st April 2019, the no cost to the landlord’ provision will no longer be available. As a result of this landlords will not be able to register a ‘no cost to landlord’ exemption, which was previously registered by those who were unable to make improvements to their property without incurring a cost. This means that domestic landlords must use their own funding to cover the cost of improving their property to EPC band E. This requirement is subject to a spending cap of £3,500 (inclusive of VAT) for each property and is only necessary when third-party funding is unavailable.
What about exemptions?
In some cases, landlords are able to register an exemption, despite the property not meeting the standards. Additionally, there are certain properties for which an EPC is currently not required.
Landlords are able to register exemptions in cases including
- Wall insulation exemption – a copy of written opinion from a relevant expert stating that a property cannot be improved to an E rating because the recommended wall insulation measure would have a negative impact on the property (this mainly applies to listed buildings).
- All recommended improvements have been made but the property remains below an E – need to supply details of energy efficiency improvement recommended for the property in recommendations report/ report by a chartered surveyor/ Green deal report. Also details to prove all measures have been tried to bring the property into compliance with the regulations.
- Below and E and no improvements can be made – a copy of the relevant report (recommendations report) to prove this (this one is highly unlikely as all buildings have capability to improve, especially those below an E).
- Consent exemption – copy of any correspondence demonstrating the consent for energy efficiency measure was required and sought and this consent was refused.
- Devaluation exemption – copy of a report prepared by an independent RICS surveyor that provides evidence the installation of a measure would devalue the property by more than 5%
- Exemption on recently becoming a landlord – the date on which they became a landlord, the qualifying circumstances on which they became a landlord (six months only).
Additionally properties which may not require an EPC include
- listed or officially protected and the minimum energy performance requirements would unacceptably alter it
- residential agricultural building that doesn’t use much energy
- a detached building with a total floor space under 50 square metres
- due to be demolished by the seller or landlord and they have all the relevant planning and conservation consents
Matt Lavin of Benoit lettings says “With the government focusing on higher standards for tenants when it comes to energy efficiency, we are seeing a real appetite from landlords to choose to purchase new build properties to their portfolios, thanks to energy efficiency being included by design”.
If you would like any further information about MEES or would like to speak to us about lettings and property management please contact us.