5 June 2017
What is it? Introduced by the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, the Minimum Energy Efficiency Standards - or MEES for short - makes it unlawful from the 1 April 2018 to grant a lease or permit a lease renewal of a property with an EPC rating of F or G. As a result of this, the landlord is required to carry out works to improve the rating to an E or above, and possibly at their own cost in order to let the premises.
Who does it affect?
The Regulation determines that a commercial or non-domestic leased premises within the private rented sector will apply to MEES. Further to guidance provided by the Department for Business, Energy & Industrial Strategy released in February 2017 a leased commercial Listed Building will apply under MEES subject to the necessary improvement works not impeding the fundamental characteristic of the building.
Why should I know about it?
Ignoring this Regulation will prove be extremely costly. The penalties for breaching the legislation include fines from £5,000 or 10% of the rateable valuable up to a maximum of £150,000 applicable per non-compliance. In the event of a substantial breach, the non-compliance could be subject to an additional publication penalty. These penalties will be enforced by the Local Weights and Measures Authority for their area.
When is it important to look at this?
Acting now and being proactive will aid in actively avoiding pitfalls in the future such as rising costs for materials required to carry out recommended works to improve the rating. This will also allow time to effectively maximise your portfolio. In addition, the guidance released in February 2017 provides for 5 different scenarios where a possible exemption would result in giving the landlord relief from the Regulation for a period of 6 months or up to 5 years, subject to making an application and successful registration to the to the PRS Register of Exemption. The register is available from the 1 April 2017.
How you can do something about it?
SHW have the knowledge, experience and understanding to assist in all aspects from arranging an EPC assessment, to project managing the recommended works, to making an application for exemption on behalf of the client. We can also risk analyse a portfolio of properties giving advice on a strategic level for the potential to recover costs of works from a service charge to inclusion of suitable and adequate clauses within a lease to protect concerned parties.
Director & Head of SHW's Sustainability Department Thomas Coulson said: "The early signs are clearly showing MEES is going to have a massive impact on the commercial property industry post enforcement date on the 1 April 2018. Acting now will not only be a proactive approach but also potentially a cost effective method too.''
For advice on how to comply with MEES and what to do next, contact
Thomas Coulson: firstname.lastname@example.org