What is MEES?
MEES is a set of Minimum Energy Efficiency Standards set out by the Government for commercially-let properties.
From April 2018, new MEES rules mean a landlord cannot renew or grant a new tenancy of longer than 6 months if their property has an EPC rating of ‘F’ or lower. Anything lower will mean the landlord is liable to pay a substantial fine.
The minimum efficiency standard is there for two reasons:
- Making sure the UK’s housing stock is more efficient benefits the Government because it helps them reach carbon reduction targets. The Government has committed to reducing carbon emissions 57% by 2030 on 1990 levels. More efficient heating systems and better insulation means less heating required by tenants. Some current forms of energy generation are carbon-heavy and therefore lowering energy demand is better for the environment.
- Good news for Domestic and Commercial tenants because they’re the ones paying the bills. Living in a very inefficient house or running an inefficient commercial property means more money spent on heating and lighting – therefore it is worthwhile for tenants to encourage their landlord to install energy saving measures.
Although enforced home improvements may not be the most welcome news for landlords, it should be seen by them as a value-adding opportunity. Tenants and property developers will often take the EPC rating of the property into account before renting or buying.
What you need to know and what to do
If you have commercial or domestic properties that do not meet the new MEES requirements, then you need to start bringing these properties up to standard, in line with the legislation.
- Step 1 – Evaluate the EPC rating of your property stock - List all properties that currently have an EPC rating of E, F or G.
- Step 2 – Complete a MEES Compliance Advisory Report to allow us to identify correct improvement opportunities. - An analysis of the current EPC for your property by our accredited Energy Assessors who will remodel the existing EPC. This is a technical desktop review and will allow us to take into consideration any improvement works that your property may require.
- Step 3 – Detailed remodelling and analysis with improvement plan (MEES Compliance Advisory Report) - Once we have established the current situation in step 2 above, it will allow us to make a bespoke set of recommendations for energy efficiency improvements for your property. Using our remodelling tool, we can make changes dependant on costs, payback periods and your personal preferences.
- Step 4 – Making the improvements - Once the improvements have been made we can then organise the survey on your properties.
- Note: - EPCs dated before April 2012 will be difficult to re-model, albeit they are still valid from the validity point of view. However, the EPC engine was updated in 2012 with a major update on energy efficiency calculations.
It is now law that from 1st April 2018 it will be illegal to issue a new lease or extend a lease on commercial properties in England and Wales that do not reach at least an E energy efficiency rating. From April 2023 this regulation will apply to all commercial leases including those who have a tenant in occupation.
Under the following circumstances landlords will have six months to comply with the new regulations starting from the day they became landlord under that tenancy. This will be either:-
- When a lease is granted by order of a court or a tenant exercising a right under the Landlord and Tenant Act 1954.
- When a non-compliant occupied property is sold or transferred to a new landlord or lender in the case of receivership.
The following buildings are exempt from the new regulations and do not need any form of certificate:-
- Listed buildings - as long as they do NOT have a current Energy Performance Certificate
- Buildings due to be demolished
- Leases less than six months of over 99 years
The following examples are where the buildings will be exempt but will need to provide evidence from an experts report:-
- Improvement measures are not within a 7 year payback.
- The changes needed will reduce the value of the property by 5% or more.
- Installing wall insulation could damage the property.
- It is not possible to gain the consent for the works to be completed required from the tenant, lender or superior landlord.
Penalty charges and enforcement
It will be the responsibility of the local authority to enforce the regulation and record exemptions on the national exemption register. Penalties for non-compliance of Minimum Energy Efficiency Standards in Commercial properties are as follows:-
- Non-compliance - Fine of £5,000 and publication of non-compliance.
- Providing misleading information - Fine of £5,000 and publication of non-compliance.
- Renting out a non-compliant property for up to 3 months - 10% of rateable value with a minimum penalty of £5,000, a maximum penalty of £50,000 and publication of non-compliance.
- Renting out a non-compliant property for more than 3 months - 20% of rateable value with a minimum penalty of £10,000, a maximum penalty of £150,000 and publication of non-compliance.
Key dates for domestic properties
- 1 April, 2016 - Domestic tenants can request energy efficiency improvements to properties, and these cannot be reasonably refused.
- 1 April, 2018 - The regulations apply to new leases granted to new tenants and lease renewals granted to existing tenants.
- 1 April, 2020 - The regulations apply to all leases, including leases that already exist with tenants in occupation.
Domestic property are exempt under the same rules as for non-domestic properties highlighted above.
Penalty Charges and Enforcement
- Non-compliance - Fine of £2,000 and publication of non-compliance.
- Providing misleading information - Fine of £1,000 and publication of non-compliance.
- Renting out a non-compliant property for up to 3 months - £2,000 fixed penalty.
- Renting out a non-compliant property for more than 3 months - £4,000 fixed penalty.
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