MEES: Start acting now
From 1st April 2018, landlords will be prevented from renting out both residential and commercial properties if they do not meet the Minimum Energy Efficiency Standard (MEES).
The MEES was introduced in March 2015 by the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.
From 1 April 2018, landlords of buildings where the scope of the MEES Regulations apply, will be unable to grant a new lease (which will also include the renewal of an existing lease) if the energy efficiency rating of the premises is an F or G.
After 1 April 2023, landlords will be prevented from continuing to let any properties which fall below an energy efficiency rating of E.
There will be exceptions to this, for example if the property is a listed building or if an EPC is not required for the particular building.
This will only affect leases of more than six months (unless the lease includes a right of renewal, in which case it would still apply to such a lease) and leases for no more than a term of 99 years.
Landlords should start reviewing their portfolios now to ascertain whether they are likely to be caught within the MEES Regulations in order to be able to plan any proposed works.
It is believed that there will be significant penalties imposed for not complying with the MEES Regulations ranging from £5,000.00 to £150,000.00 calculated depending upon the length of time that the landlord is in breach of the MEES Regulations and the rateable value of the property.
When drafting new leases at this stage the following points need to be considered:
- The tenant’s ability to sublet. Would it be considered unreasonable for the landlord to withhold consent to a subletting on the basis that energy improvement works would need to be undertaken to the property for the subtenant to grant a new lease? Does the tenant require provision in the lease to ensure the landlord will undertake such works to allow them to sublet the premises?
- Do the service charge provisions and statutory compliance clauses allow the landlord to recover the capital expenditure required for such improvements from the tenant?
- Does the landlord’s right to re-enter the property extend to allowing entry to undertake energy efficiency improvements to it?
If you have any queries regarding how the MEES may affect you, please contact us on 01223 578070 or email us on firstname.lastname@example.org.