What Is MEES?
The UK government has a legally binding commitment to reduce carbon emissions 80% by 2050. To meet this target, a huge amount of work is needed to upgrade the country’s ageing and inefficient buildings which are responsible for 34% of all emissions.
To encourage property owners to undertake improvements, the Government has introduced a series of new Minimum Energy Efficiency Standards (MEES) which place restrictions on the potential to lease any property which has an Energy Performance Certificate (EPC) of F or G.
The new standards are being gradually phased in. Properties with an EPC of F or G:
- cannot be let for new tenancy agreements from 1st April 2018
- cannot continue to be let for a domestic lease from 1st April 2020
- cannot continue to be let for a non-domestic lease from 1st April 2023
Where a landlord wishes to continue letting a property which does not meet the minimum standard they will need to make improvements that bring the energy performance up to at least an E rating.
Who's Paying For All This?
Here’s the important part.
Landlords are not expected to finance the cost of improvements themselves.
They are however obliged to research and explore all available grants and funding offers which may include:
- Energy Company Obligation (ECO)
- Green Deal
- Funding from central government, a local authority, or a third party.
Access to these funding streams is dependant on a number of factors such as the potential vulnerability of the tenant, the nature of the work required, and the condition of the property in question.
In some circumstances a landlord may be able to claim an exemption from MEES and continue to rent their property despite failing to meet the new standards. Examples can include an inability to secure adequate funding, or where the property remains below an E despite improvements having been made.
Some listed buildings are also exempt but only where work will unacceptably alter the aesthetic of the building.
Enforcement and Penalties
MEES regulations will be enforced by local Trading Standards and Health and Saftey Officers.
Non-compliance can lead to a fine from £5,000 and £50,000 for an initial three months, rising to between £10,000 and £150,000 for prolonged infringements. Furthermore, landlords found to have breached regulations will be named and shamed on a public register.
Impact on Landlords
With an EPC score determining the ability for properties to be rented or not, it is vitally important that certificates are up to date and accurate.
In 2012, several improvements to the EPC procedure made the methodology of assessment more rigorous and reliable. This means that what passed for an E then might not do so now. Therefore we advise all landlords to check that their EPCs are recent, and to request a new survey where needed.
Failure to meet with new standards could result in loss of income and reputational damage, not to mention the headache of dealing with fines and hurried improvements. Property owners should also consider the financial implications of continuing to hold stock that is below market expectations for energy standards. Our best advice is to take the time now to research available funding and make necessary improvements before this becomes a serious issue.
Act Now To Reduce Risk
Government is consulting on proposed changes to the ‘no cost’ approach, and may require a landlord to spend up to £2,500 per property to achieve a minimum of a band E.
It is also widely accepted that the government will eventually raise the minimum standard to D, therefore landlords and investors should consider the potential implications for E-rated buildings and take advantage of available funding opportunities that will improve their properties at no cost.
The new Minimum Energy Efficiency Standards are the first step in a long-awaited package of measures designed to improve the UK’s housing stock.
Landlords and property owners must ensure that all properties are up to a minimum energy efficiency rating of E or be faced with the prospect of heavy fines and an inability to continue to let.
There is ample funding available to cover the cost of improvements which will increase property value and enhance tenant comfort and wellbeing.
Landlords in Sussex who have any concerns can contact BHESCo for the following support:
- An up-to-date accurate EPC
- Identifying changes to improve EPCs
- Project management of efficiency improvements
- Assistance applying for funding