This has been introduced by government to improve the quality of rented buildings and reduce the overall CO2 emissions in accordance with the UKs targets for decarbonisation. From 1st April 2018, phase one of the MEES regulations came into force which has big implications for landlords of 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.
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.
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), and recommend opportunities for improvement.
What does this mean for Domestic/Residential Landlords?
From the 1st April 2018 all private rented properties must achieve an energy efficiency rating of at least an E on their EPC, to meet the minimum standards. This will initially only apply upon the granting of a new tenancy to a new or existing tenant.
Landlords will need to take action to avoid any non-compliance penalties (estimated at £5000) and protect the value of their assets. If a property does not meet the minimum standards, it will be deemed unlawful for landlords to let or market their property.
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 Effciency 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 propert, but could be as much as £150,000
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 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.