MEES and Energy Performance - Banned from Letting below E

The Minimum Energy Efficiency Standard (MEES) is almost upon us and will see Landlords charged with the requirement to bring their rental property to a minimum EPC rating of E. Property with F and G rating will effectively be banned from the rental market.

Key deadlines for Landlord to be aware of are that;
  1.  from 1 April 2018, landlords are no longer be permitted to grant new tenancies extend or renew a tenancy to an existing tenant if the property has an EPC rating of band F or G. G (as shown on a valid Energy Performance Certificate for the property);
  2. from 1 April 2020, landlords cannot continue letting a rental property which is already let if that property has an EPC rating of band F or G.

In both cases above Where a property is rated band F or G a landlord will need to make improvements to the property to raise the EPC band to a minimum level of E. However, there are exemptions to this which are:

  • the landlord is unable to obtain funding to cover the cost of making improvements; or
  • where all improvements which can reasonably be made have been made, and the property remains below an EPC rating of Band E.
  • Where the property is energy inefficient we strongly advise you read the government guidance Hard to treat and energy inefficient properties

The key element of the Energy Efficiency Regulations was originally based on a principle of ‘no cost to the landlord’, This meant that if a landlord could not obtain funding to undertake the recommended improvements they will be exempt from meeting the minimum energy efficiency level of band E. However, the Government is now reviewing this decision with speculation that Landlords will be required to contribute between £2500 and £5000 towards the cost of improvement.

The remaining costs can be made up of one or a combination of the following:
  1. A Green Deal Plan;
  2. Energy Company Obligation or similar scheme;
  3. Funding provided by central government or local authority or third party at no cost to the landlord;
It is thought that if the recommended works cannot be covered by funding plus the Landlord contribution then the Landlord can apply for an exemption for the property. In this case the Landlord will need to apply to the national PRS Exemption Register.
The final decision on Landlord contribution is now subject to a Consultation paper which has been published and can be viewed here. This remains open until the 13th March, with the results expected on the 1st April which somewhat oddly is the day the regulations come into force. Whilst there is some speculation that introduction of the the legislation will be delayed, we can say with some certainty that the minimum rating level will not be changed and Landlord should act now to ensure their properties comply.

 
 
 
EPC Compliance
 
From April 2017 -  The Energy Efficiency (Private Rented) Property Regulations 2015 set out a Minimum Energy Efficiency Standard (MEES) for all privately rented properties in England and Wales. From April 2018, it will be unlawful to let properties with an Energy Performance Certificate (EPC) rating of F or G, unless exemptions apply
 
Key points
 
  • Since October 2008, Landlords must provide Energy Performance Certificates whenever a new tenancy is due to begin.
  • EPC requirements apply to a self contained dwellings (flats, houses)
  • An EPC in theory is not required where renting a room in an HMO/ shared house but the deregulation bill requires an EPC is provided in order to rely on S21 eviction so one should be produced for the building
  • An EPC last for 10 years
An EPC must be commissioned before a property can be marketed, it also clarifies that the EPC must actually be issued within 7 days of marketing. It also clarifies that it is not only the vendor or landlord who is responsible for ensuring that this requirement is met, but any person acting on their behalf is now also responsible such as a managing agent. The first page of the EPC will become an essential part of any written particulars for properties being marketed for rent. All Letting Agents will now need to be satisfied that an EPC has been commissioned prior to marketing a property for rental

An EPC on a rental property lasts for ten years whether or not improvements are carried out. In other words, if you carry out works such as extra insulation, you do not need to have a new EPC. However, if you do, then you are obliged to show this latest current EPC to prospective and eventual tenants.

The need for Home Energy Certificates is required due to EU legislation, the directive for the UK is known as 2002/91/EC. Certificates can only be issued by a qualified energy assessor. Property is rated between A-G with 'A' meaning the property is very energy efficient and 'G' meaning  inefficient. There isn't any requirement by law to make improvements to improve efficiency it's just mainly for tenant information.

Any advertisement (whether print / electronic / email / window display) should include the first page of the EPC. The penalty for failing to adhere to the regulations remains the same. This is £200 for dwellings and will still be enforced by trading standard officers.