In 2016, The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 established the new Minimum Energy Efficiency Standards (MEES) in the commercial private rented sector along with the Domestic sector.
This has been introduced by the government to help improve the quality of private rented buildings and reduce the overall CO2 emissions in accordance with the UKs targets for decarbonisation from the Paris agreement. From 1st April 2018, phase one of the MEES regulations came into force which had big implications for landlords of private rented property. As a result of this, it is now deemed unlawful to let properties with an Energy Performance Certificate (EPC) rating below an ‘E’ rating.
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MHCLG previously highlighted the scale of those affected by MEES, with 20%-25% of residential and commercial properties in England and Wales hitting or falling below the minimum standards. There is also a chance that the standard could be raised further to a D rating by 2025 and a C rating by 2030 if projections.
Landlords and their agents should act by commissioning an up-to-date Energy Performance Certificate which will identify the current rating (which may have changed over time as EPC grades can alternate negatively between a grade and a full grade every time Building Regulations Approved Document L is updated).
What does this mean for Non-Domestic/Commercial Landlords?
From the 1st April 2018, it is now unlawful to grant a new lease for properties in England and Wales which do not meet the Minimum Energy Efficiency Standards (MEES). The regulation also applies to lease renewals.
It is important to act quickly to ensure your property complies as the valuations of properties not meeting the standards are now likely to be affected, as their marketability will be diminished. Moreover, financial penalties for non-compliance are linked to the rateable value of the property, but could be as much as £150,000.
About MEES Exemptions
Landlords can register an exemption in order to remain compliant with MEES regulation, despite their property not meeting the standards. All exemptions last 5 years except the exemption: recently becoming a landlord, which lasts for only 6 months. Unlike an EPC that stays with a property, an exemption does not. It is linked to the landlord who registered the exemption, so if a new landlord comes into the property, they will need to re-register the exemption.
All exemptions for Non-Domestic properties can be registered at the following website:
What next for MEES?
The key dates provided below underline when the regulations will be enforced, with the regulation scope expanding over a five year period from 2018 to 2023.
1st April 2018
it is now unlawful to grant new leases for residential or commercial property with an EPC rating below an ‘E’.
1st April 2019
Removal of the ‘no upfront cost’ provision which means that should third party funding be unavailable, landlords will need to self-fund improvements.
1st April 2020
MEES regulation will extend to ALL residential privately rented property which are required to have an EPC.
1st April 2023
MEES regulation will be extended to include ALL existing commercial leases.