Complying with MEES: Improve your EPC rating before the deadline

Minimum Energy Efficiency Standards (MEES) are regulations aimed at improving energy efficiency standards in properties – this article relates to commercial properties only under the MEES regime, the EPC rating of a property is crucial if you want to grant a lease. Since 2018, commercial properties are required by law to have an EPC rating between A and E and forms part of the government’s aim to be carbon neutral.

The upcoming and key deadline for landlords is 1 April 2023. Landlords must make sure that all properties with a current EPC certificate have a rating between A to E before 1 April 2023. This legal obligation also applies to all existing leases granted to tenants before 1 April 2018. For instance, if a landlord granted 10-year lease in 2016 of a property with a sub-standard EPC rating, they will be required to improve the rating, even if there is no change in tenancy. Compliance with the current MEES regime is important. Failure to comply will attract financial penalties ranging from £5,000 to £15,000. Furthermore, there will be publications about landlords who fail to comply with their obligations.

Landlords can prepare for the deadline by reviewing the EPC rating of their properties on the national EPC register. The website will show landlords the current EPC ratings of their properties and when the certificate is going to expire.

Landlords can also prepare for the deadline by checking if a property is exempt under the MEES regime. Some exemptions include:

1. All possible improvements have been made: landlords can rely on this exemption if they have carried out all relevant improvements or cannot make any improvements to change the sub-standard rating of the property;
2. If a landlord has used all reasonable efforts to obtain consent and cannot gain such consent from any relevant third parties (such as the local authority) or the tenant to carry out the necessary EPC improvements;
3. If a landlord has received a surveyor’s report which concludes that any improvements would devalue the property’s market value by 5%;
4. If someone has just recently become a landlord, they can benefit from a temporary exemption as it will be unreasonable to expect the landlord to comply with MEES regulations instantly. This temporary exemption last for 6 months.

The exemptions come with complex and ongoing conditions: they last for 5 years and require registration on the PRS Exemptions Register.

Landlords should also be aware that the government aims to increase the minimum standard of EPC ratings in the future: by 2027, the government intends to raise the standard of EPC ratings to a C and then achieve a rating of at least B by 2030. Keeping pace with the changes is crucial and landlords must make their obligation under the MEES regime a priority.