MEES - Minimum Energy Efficiency Standards - Energy Efficiency Regulations

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MEES Background

The Regulations were published in February 2015, however the rules are constantly updated so please contact us for the latest information.

The Regulations were put in place to meet Government obligations set out in the 2011 Energy Act and they are set up to improve the energy efficiency of privately rented sector (PRS) property. Both domestic and non-domestic rented properties are included however, whilst the principles are the same, there are some differences.


Why are the regulations aimed at the Private Rental Sector?

Tenants have less control over the properties that they live in and Private Rented Sector property tends to be lower rated and more likely to be F and G rated. The PRS sector is growing fast, it has doubled in size in a decade.

MEES in Private Rented Sector MEES in the Private Rented Sector

The regulations

The regulations are part of the Department for Communities and Local Government, Energy Efficiency in Buildings - click here to see the latest documents.

Where the regulations apply

These regulations apply to the Domestic private rented sector in England and Wales ONLY. However the Welsh Government may have their own angle on the regulations and may wish to adopt them or alter them. Welsh landlords MUST have a licence awarded to them by the local authority, to allow them to rent out properties. It may be that MEES forms part of the licence. Scottish Government are looking at the regulations, but have their own energy regulations in the form of Section 63 and Section 64.

Key Policy Decisions and Discussions

  • Domestic dwellings let on tenancies of less than 6 months or of 99 years or more are excluded
  • All types of domestic property are included except those excluded from having an EPC
  • Places of Worship used for religious activities
  • Buildings/dwellings that are of historical significance, the government now seem to be considering listed buildings as being inside the scope – but there is debate
  • Temporary buildings with a planned time of use of two years or less
  • Residential buildings which are intended to be used less than four months of the year

The Minimum Energy Efficiency Standard (MEES) has been set at an E rating

  • Dwellings that only achieve an F or G rating must be improved to at least an E rating.
  • There is a mechanism that allows dwellings to become exempt from the regulations
  • It is likely that the MEES will be raised over time to bring all dwellings up to a higher standard.
Energy Efficiency Ratings

 

Exemptions

Landlords will be eligible for exemptions from reaching an E rating where they can evidence

  • The measure are not cost-effective – on a 7 year payback or under the Green Deal Golden Rule (pay for the improvement via savings generate over he lifetime of the improvement)
  • The Landlord cannot obtain necessary consents to install the improvements (from tenants, lenders or superior landlords)
  • A suitably qualified expert provides written advice that the measure would reduce the properties value by 5% or more, or that wall insulation will damage the properties structure.
  • The exemptions are valid for five years only and cannot be transferred to a new landlord

To achieve the MEES – Measures that improve the dwelling to an ‘E’ rating must be permissible, appropriate and cost effective, it is important to note that tenants already have the right to ask landlords to consider reasonable improvements to properties. Conversely, tenants also have the right to refuse consent.

Timescales

There are currently mechanisms in place to check that an EPC is in place prior to a new tenancy, as the property would need to be marketed.

From 1st April 2020, the regulations will apply to ALL privately rented domestic properties in the scope of the regulations, including where a lease is already in place and property is currently occupied by a tenant. By definition, this means that all PRS properties must have a valid EPC in place or have a valid exemption for the property on the PRS register.

Timescales for MEES

Enforcement

The MEES Regulations are enforced by Local Weights and Measures Authorities (LWMAs). To avoid enforcement, Landlords need to do one of the following:

  • Ensure that a valid EPC is in place for the property
  • That the EPC shows that the property achieves an ‘E’ rating or better
  • Where the property has not achieved an ‘E’ rating, an exemption is uploaded to the register with sufficient evidence as to why the exemption is applicable.

LWMAs can serve a compliance notice on the landlord if they do not agree or feel insufficient evidence is supplied on the PRS register. Ultimately the LWMAs may issue a penalty notice (a fine), these are potentially very costly to a landlord where a property is let in breach of the MEES Regulations or where a penalty is imposed, the lease as between the landlord and the tenant remains valid and in force. Fines up to £10,000 are possible if you fail to comply or provide false information and there is an appeals process.

The Government has committed to review the effectiveness of these regulations every 5 years, the first being in 2020.

The exemptions register is being run by Northgate Public Services and is split into two sections for domestic and non-domestic properties.

Opportunities for Landlords

There are obvious threats but also opportunities, the most obvious threat to landlords is the financial cost of upgrading non-compliant buildings and the potential loss of income if a property cannot be rented out. Additional fines for non-compliance or inappropriate applications for exemptions are also a threat. There are, however, opportunities for landlords to engage with tenants to enter green leases and there is also the potential to increase rental and asset value through making energy efficiency improvements and doing other upgrades at the same time – therefore saving overall costs. All landlords should take the opportunity to read the Government guidance which has been published.

Landlords should:

  • Audit their portfolios to understand which properties are within scope of the MEES Regulations and whether exemptions might apply
  • Put in place EPCs to ensure that each property has the most up to date information and rating.
  • Look at lease terms and renewal dates to prompt when a property will next be marketed or tenancy is renewed
  • Review their leases to understand their rights.

Managing Agents

Similar to landlords, Managing Agents are responsible for the on-going management and maintenance of properties. They should consider the age of the EPC and if any work has been done to the property following the issue of the EPC.

Funding available

There is funding and support for Landlords to improve the efficiency of their properties:

  • ECO Funding – Energy Companies Obligation. This is probably the most important and useful funding scheme. It is focused on bringing people out of fuel poverty. Criteria is based on occupiers earnings and if they claim qualifying benefits and it is also based on location of the property. Energy companies will manage the scheme.
  • RHI – Renewable Heat Incentive. This allows a property owner to pay for a renewable heating system over a period of 7 years, it drastically reduces the cost of installing a new heating system in most cases it covers the total cost. Pay back is usually less than the 7 years that the payment runs for. It needs an EPC for application and covers Air Source, Heat Pump, Ground Source Heat Pump and Biomass Heating
  • In addition, most local authorities have some form of grants or funding schemes.

 

New information June 2019

The majority of recent amendments relate to domestic privately rented property and can be summarised as follows: