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Minimum Energy Efficiency Standard (MEES) for Rental Property

From April 2018, residential properties have required a minimum energy performance rating (EPC) of E before they can be legally let and from 1st April 2020 this minimum standard will affect existing residential tenancies.

What is the Minimum Energy Efficiency Standard (MEES) for a residential property? 

From the 1st April 2018, any properties let in the private rented sector must have a minimum Energy Performance Certificate (EPC) rating of E.  It is unlawful to rent a property which breaches the minimum E rating, unless there is an applicable exemption. 

Landlords with substandard properties need to carry out works to improve the EPC to a rating of E or above, or face penalties of up to £4,000.   However, only appropriate, permissible and cost-effective improvements are required under the regulations. 

MEES apply to all residential properties required to have an EPC and to all tenancies let under Assured Tenancies, Assured Shorthold tenancies and Rent Act tenancies. 

Currently, MEES applies only on the grant or renewal of a lease. However, from 1 April 2020 (in the case of residential properties), MEES will apply where a landlord continues to let a property.  Effectively this means that by the relevant date, landlords will need to bring sub-standard properties up to an EPC rating of E or higher, or register an exemption.

Why are these changes taking place?

The built environment has been identified by government as a major contributor to Greenhouse Gas (GHG) emissions and thus poses a threat to the UK meeting its 80% carbon reduction target by 2050. The Government hopes that the MEES regulations will help improve the energy efficiency of older buildings while working towards achieving the UK’s carbon reduction targets.

What are the exemptions?

Landlords are eligible for an exemption from reaching the minimum standard where they can provide evidence that one of the following applies:

  • Where all possible cost-effective improvements were carried out but the EPC rating remains below an E rating. 'Cost effective improvements' are those that have been installed with a Green Deal.
  • Where consents from a third party, such as a lender, freeholder or sitting tenant, for the improvement works were denied, or were provided with unreasonable conditions.
  • Where carrying out the works would reduce the market value of the property by more than five per cent, as evidenced by a qualified independent surveyor. 

An exemption will last for up to five years and must be pre-registered on a central register for a landlord to rely on it.

There is a high likelihood that the minimum energy standards for 2018 will be raised in the future, so landlords should also consider whether it is worth doing more than the bare minimum and implement works to improve any buildings that also fall within ratings C and D.

MEES is just one of the many regulatory requirements that Landlords should be aware of.   Here at Samuel & Son our lettings professionals can assist you with all aspects of letting and property management including advising you on your legal obligations and making sure that you have everything covered.   Please get in touch with us to find out how we might be able to help you.  Tel: 01435 810077.