The domestic Minimum Energy Efficiency Standard (MEES) regulations set the minimum energy efficiency level for private rented property under the Energy Act 2011. There have been changes to these regulations that you need to be aware of, so here our North West letting agents go over the important details for you.
When you need to take action
Since 1 April 2018, it has been unlawful for landlords to grant a new lease for properties that have an energy performance certificate (EPC) rating below E, unless the property is registered as an exemption. On 1 April 2020, the prohibition on letting F and G properties was extended to all relevant properties, irrespective of whether there’s been a change in tenancy.
If your property is let on an assured tenancy, a regulated tenancy, or a domestic agricultural tenancy, and it is legally required to have an EPC, then it’s covered under the regulations. If it’s covered and has an EPC rating of F or G, you will need to take measures to bring it up to E or above before you can let, or continue to let, the property.
It’s possible that the MEES Regulations will be upgraded further in 2022 to C or D, so now is the time to take action to ensure your property is compliant.
What you need to do
First of all, it’s important to remember that a cost cap of £3,500 (including VAT) applies, so you’ll never be required to spend more than this on energy efficiency improvements.
There are 3 ways to fund improvements to your property:
- Third-party funding
- Combination of third-party funding and self-funding
Contained in your EPC report, you will find a list of recommendations for improving the energy efficiency of your property, along with the indicative cost, the typical savings per year, and the EPC rating after the improvement has been made. The recommended measures are varied, but could include:
- Internal or external wall insulation
- Increase hot water cylinder insulation
- Low energy lighting
- Solar water heating
- Draught proofing
If your EPC rating is F or G, you must make ‘relevant energy efficiency improvements’ to your property, which means using the recommendations on the list up to the £3,500 cost cap. If you reach the cap but your property is still not rated as E or above, you can register an ‘all improvements made exemption’, under which you will not be penalised and can continue to let the property.
Be aware: if your chosen methods for energy efficiency improvements do not appear in the list on your EPC report, and they fail to improve your rating to an E or more, you cannot register an exemption and will be expected to invest further in measures that will help your property to meet the requirements before you can let it.
If you don’t think you can meet the requirements under the MEES Regulations, don’t panic. In addition to the ‘all improvements made’ exemption, there are others under which you can register if your property meets the criteria:
- ‘High cost’ exemption
- Wall insulation exemption
- Third-party consent exemption
- Property devaluation exemption
- Temporary exemption due to recently becoming a landlord
These need to be registered on the Private Rented Sector (PRS) Exemptions Register, which can be done online. After they expire, you must try again to improve the property’s EPC rating, or register another exemption.
The MEES Regulations are enforced by local authorities, who may serve you with a compliance notice if they suspect there’s been a breach. This will request information to aid their decision. If a breach is confirmed, they may issue you with a financial penalty. There is a maximum £5,000 penalty in total per property. Within these regulations, the amount is decided by the relevant local authority. It’s worth remembering that local councils keep these fines, so they are incentivised to enforce them.
How our North West letting agents can help
Mistoria Estate Agents offers a variety of highly sophisticated, professional and tailored property management solutions. With branches in Bolton, Liverpool and Salford we are a leading North West letting agents. We can go through your EPC and gas and electrical safety certificates with you, to ensure you are complying with all legislation including the MEES regulations and give you peace of mind in the process. If you’d like to discuss options, don’t hesitate to get in touch on 0800 500 3015
We are members of ARLA Propertymark which means we meet higher industry standards than the law demands. Our experts undertake regular training to ensure they are up to date with best practice and complex legislative changes so they can offer you the best advice. We are also backed by a Client Money Protection scheme which guarantees your money is protected.