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It’s All About MEES

Posted by: Mim ClaridgeApr24

From 1st April 2018, the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 imposed Minimum Energy Efficiency Standards (MEES) on commercial and domestic properties that are being rented.

MEES apply to most types of commercial and domestic lettings. These new standards make it an offence for landlords of commercial and domestic properties to renew or grant a new lease of premises for a term of more than 6 months, in circumstances where the property has an Energy Performance Certificate rating within bands F and G. In the meantime, that is not to say that any lease entered into will become void – rather such a lease will remain enforceable and valid. It just means that the landlord may find that penalties are issued for non-compliance with the MEES.

From 1st April 2020 in the case of domestic property, and 1st April 2023 in the case of commercial property, a landlord will not be able to continue to let an already let property where the Energy Efficiency Rating falls within band F or G.

There are some circumstances in which a landlord may claim an exemption, e.g. if compliance would reduce the market value of the property by more than 5%. Exemptions must be recorded on the PRS Exemptions Register and will only be valid for 5 years. On the sale of a property, a registered exemption will not pass to the new owner. If a landlord has registered false or misleading information on the Register, penalties of up to £1,000 for domestic properties and £5,000 for commercial properties can be imposed.

If the enforcing authority believes that there has been a breach of the relevant regulations, it may, within 12 months of the suspected breach, serve upon a landlord a compliance notice requesting information to enable the authority to determine if a breach has occurred. Non-compliance with a notice is subject to a maximum penalty of £2,000 for domestic properties and £5,000 for commercial properties; additionally details of the penalty may be published.

Where the enforcing authority decides to impose a financial penalty for breach of MEES, the maximum penalties are as follows:

  • A breach of less than 3 months will, in the case of domestic property, be subject to a maximum penalty of £2,000 rising to the greater of £5,000 or 10% of the rateable value (up to £50,000) in respect of commercial property
  • A breach of 3 months or more will, in the case of domestic property, be subject to a penalty of up to £4,000 rising to the greater of £10,000 or 20% of the rateable value (up to £150,000) in respect of a commercial property.

Either of these penalties may be combined with penalties for non-compliance with a compliance notice and/or registering false or misleading information on the PRS Exemptions Register. In the case of a domestic property, if combined, the maximum penalty that can be imposed is £5,000 for a single domestic property.

In addition to imposing a financial penalty the relevant enforcing authority may also publish some details of the breach on a publicly accessible part of the PRS Exemptions Register.

If you are a landlord and have not already done so, you should be reviewing your portfolio ensuring that EPCs are current, ascertaining if improvements are required and whether or not the costs of such improvements can be passed on to your tenants.

Detailed Government guidance for landlords can be found on the internet by clicking on the following links:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/698541/Domestic_Private_Rented_Landlord_Guidance_-_March_18.pdf

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/656541/Non-Dom_Private_Rented_Property_Minimum_Standard_-_Landlord_Guidance.pdf

This article does not constitute legal advice and is for general information purposes only.

 

Lana Farrell, Head of Property

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