In April 2016, The Energy Efficiency (Private Rented Property) Regulations 2015 brought into force Minimum Energy Efficiency Standards (MEES) in the residential and commercial Private Rented Sector (PRS). These standards apply to properties in England and Wales.
The cost of non-compliance is significantly higher for non-domestic landlords as it is linked to the rateable value of the property- which means it could be as much as £150,000.
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Minimum Standards for Non-Domestic Properties
Since 2018 It has been unlawful to grant new leases for private rented commercial properties with an EPC rating below an ‘E’. This scope will be expanding further in 2023 to include existing leases. The government has also established a long term target of EPC rating B for all private rented commercial properties by 2030, with the industry just waiting on how this will be implemented.
DLUHC 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. The government has also proposed that this standard be raised to EPC rating C for new tenancies by 2025 and for all tenancies by 2028, however this has yet to be confirmed.
DOWNLOAD MEES GUIDEAbout 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 both Domestic and Non-Domestic properties can be registered at the following website: https://prsregister.beis.gov.uk
Where all recommended improvement measures for the property have been made (or there are non that can be made), but the property remains below an EPC E rating.
Landlords will need to supply details of energy efficiency improvement recommended for the property in recommendations report/report by a chartered surveyor.
Details will also be required to prove all measures have been tried to bring property into compliance with the regulations.
Certain wall insulation systems may not be suitable in certain situations, even where they have been recommended for a property,
A copy of written opinion from a relevant expert is required here, which states that a property cannot be improved to an E rating because the recommended wall insulation measure would have a negative impact on the property (this mainly applies to listed buildings).
Certain energy efficiency improvements may require third party consent before they are installed in the property. This may be required from a tenant, local authority, mortgage lenders etc.
Landlords will need to supply a copy of any correspondence demonstrating the consent for energy efficiency measure was required and sought ,and this consent was refused in order to register for this exemption.
This requires copies of three quotes for the cost of purchasing and installing the measure from qualified installers, and confirmation the landlord is satisfied that it does not meet the seven year payback rule, including calculations to support this.
Where all the recommended energy efficiency measures would lead to the property being devalued.
An independent RICS surveyor would need to provide a report which confirms that the installation of a measure would devalue the property by more than 5%.
This is considered to be a temporary exemption which only last 6 month’s. This exemption applies where the individual has become a landlord “suddenly”
When registering this exemption, the landlord must provide the date on which they became the landlord for the property, and a narrative explanation of the circumstances under which they became the landlord