In April 2018, new legislation will come into force which will set a new minimum energy efficiency standard for rental properties. We've put together a guide to the potential impact of the new legal standard on landlords.
The Minimum Energy Efficiency Standard (MEES)
The MEES was introduced in March 2015 and originated in the Energy Act 2011. From April 1st, 2018, landlords who are covered by the MEES legislation must not grant or renew tenancies on properties which do not have a minimum energy performance certificate rating (EPC) of E, unless an exemption is registered and approved.
Why is the MEES legislation being introduced?
The UK government has identified the built environment as a significant contributor to greenhouse gas emissions. It is estimated that 18% of residential properties have an energy performance rating of F or G. The MEES legislation will help to reduce the environmental impact of these properties.
Exemption 1: The ‘golden rule’
If an independent energy contractor inspects the property and judges that every modification or improvement relevant to energy efficiency has been made, or that improvements which could be made would not have paid for themselves within seven years from the date of installation, you will be eligible for an exemption.
Exemption 2: Devaluation
If a surveyor examines the property and judges that the changes required to improve the energy efficiency of the building would devalue the market price of the building by 5% or more, you will be able to register an exemption.
Exemption 3: Consent
If consent for work which would improve the energy efficiency of the building has been refused by a third party, such as the local planning authority, you will be deemed exempt.
Any exemptions must be registered on the PRS Exemptions Register from 1st April 2018. If you fail to comply with MEES regulations and you do not register an exemption you may face a financial penalty, so you should take action now.