MEES - Minimum Energy Efficiency Standards - Summarised

The Minimum Level of Energy Efficiency

The Regulations set out the minimum level of energy efficiency for private rented property in England and Wales. In relation to the non-domestic private rented sector, Part 3 of the Regulations contains the minimum level of energy efficiency provisions, which is currently set at an energy performance certificate (EPC) rating of at least band E. As band E is a minimum, landlords who are installing relevant energy efficiency improvements may also wish to aim above and beyond the current requirement in order to achieve greater energy savings.

The minimum level of energy efficiency provisions will mean that, subject to certain requirements and exemptions:

1. From 1 April 2018, landlords of non-domestic private rented properties (including public sector landlords) may not grant a tenancy to new or existing tenants if their property has an EPC rating of band F or G (shown on a valid Energy Performance Certificate for the property).
2. From 1 April 2023, landlords must not continue letting a non-domestic property which is already let if that property has an EPC rating of band F or G

CSR Sustain carry out MEES audits and studies to help our clients improve their building performance and avoid financial penalties by ensuring that their property portfolios are compliant.

Your MEES audit will assess how well your property performs against the Minimum Energy Efficiency Standards.

If we can’t get it passed and identify any non-compliance or emerging risks, a cost-effective and actionable MEES Plan will be developed with recommended improvements and all proposed solutions will be modelled and simulated using the latest software to test their impact so you can be sure your investment will pay off.

What are the objectives of MEES?

1. Help to achieve the UK’s legislative targets for CO2 emissions from buildings to be ‘close to zero’ by 2050
2. Improve energy efficiency of poor performing properties
3. Stop the stand-off between landlord and tenant over who should foot the bill for energy efficiency improvements that benefit the tenant

MEES Timeline

February 2015: MEES regulations applied to commercial and residential properties.

April 2016: Power is put into the hands of residential tenants, they are now able to request consent from their landlord to install Green Deal compliant energy efficiency improvements (as long as there is no up-front or net cost to the landlord).

April 2018: MEES will apply to the grant of a lease on or after 1st April including lease renewals (where an EPC exists) with a minimum EPC rating of an ‘E’. The Landlord needs to make sure a property complies with MEES before the lease is granted.

April 2023: On the 1st April, MEES will be extended to cover all leases, for commercial properties it will become unlawful to continue to let a building with an EPC rating of less than an E.

What Will The Impact Of MEES Be?

1. MEES will have a significant impact on landlords, tenants and property advisors.
2. Take Action Now: to avoid higher compliance costs.
3. Penalties could be significant: based on the rateable value of a commercial property up to a max of £150,000.
4. The valuation of properties will be affected with associated implications for secured lending.
5. Rent reviews on ‘F’ and ‘G’ rated properties will be affected.
6. Possible implications for dilapidations assessment.

Will I Be Exempt?

The following exemptions include:

• Landlords once all cost effective energy efficiency improvements are complete or valid exemptions have been granted.
• Landlords if the 3rd party consents are not available or if compliance would devalue the property
• Exemptions will be lodged on a central register
• An exemption from MEES may not transfer to a buyer as circumstances may change

What Is Not Covered By MEES:

• Properties that do not need an EPC
• Properties with a very short lease
• Properties let for more than 99 years

Future timeline of MEES uplifts in EPC ratings