As part of its carbon reduction strategy, the government is introducing minimum energy efficiency standards, known as ‘MEES’, for privately rented residential and commercial properties. From 1 April 2018, it will be illegal to grant a new lease of a property that has an energy performance rating of F or G, unless you can show an exemption exists. The MEES regulations and guidance are complex and there are different rules for domestic and commercial lettings. In this article, Charlotte Dollimore, commercial property solicitor with Humphries Kirk in Poole explains the rules for commercial property.
‘Since 2008 landlords have been obliged to obtain an energy performance certificate for most properties they intend to let out. This is so that tenants understand, before they take a lease, how much the property will cost to heat and how this cost could be reduced. The ultimate decision as to whether the lease of an inefficient building should be taken has, however, always rested with the tenant’, says Charlotte Dollimore. ‘Not so from 1 April, when landlords will be prohibited from letting out property with anything less than a grade E rating, unless they can show that one of a limited number of exemptions applies.’
Properties caught by the regulations
To determine whether the MEES regulations apply, you need to ask yourself the following questions:
All exemptions must be registered. Once registration has taken place, it will be valid for the next five years.
Consequences where MEES applies
Where you have a non-exempt F or G rated property that you would like to let out, you will need to take steps to increase the property’s energy efficiency rating to at least a grade E. Failure to do this before a lease is granted will not affect the validity of the lease, but it will expose you to the possibility of a significant financial penalty.
‘Fines of between £5,000 to £150,000 may be imposed, depending on the value of the property and how long it takes for you to acknowledge your failure and take steps to address it’, explains Charlotte Dollimore.
Failure to comply with the regulations will also be published, which means a breach of MEES could cause damage to your reputation as well.
The government is committed to improving the energy efficiency of all buildings and the provisions of the MEES regulations are just one element of the government’s attempt to deliver on that commitment. Further initiatives to increase the efficiency of residential and commercial properties are likely, so, whether or not you will be caught by MEES immediately, it would be prudent for you to start thinking about the energy efficiency of your buildings now to ensure that you are ready for any further measures that may be introduced.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.