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What does MEES mean? 

The Minimum Energy Efficiency Standards (MEES) are regulations intended to improve energy efficiency standards in both commercial and residential properties. Compliance with MEES is a legal requirement under the Energy Act 2011. This article will focus on the current MEES regime and how it relates to commercial properties in England and Wales alone. Properties in Scotland are subject to different conditions.  

Current Requirements Under MEES 

For commercial landlords, compliance with MEES is crucial if you want to rent out properties in England and Wales. Since 1 April 2018, landlords are required by law to grant leases in properties that have an Energy Performance Certificate (EPC) rating between A+ and E. Anything below (F and G ratings) means the property will be considered as sub-standard. By law, properties with sub-standard ratings cannot be rented out. 

From 1 April 2023, this legal obligation will extend to all existing leases granted out to tenants before 1 April 2018. For example, if a landlord granted 10-year lease in 2016 with a sub-standard EPC rating (F and G), they will be required under MEES to improve the EPC rating even if there is no change in the tenancy agreement (subject to qualifying for any exemptions).  

Exemptions Under MEES  

Properties with sub-standard EPC ratings can benefit from exemptions under MEES. Some exemptions include: 

  • All possible improvements have been made: landlords can rely on this exemption if they have carried out all relevant EPC improvements or cannot make any improvements to change the sub-standard rating of the property;  
  •  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;  
  • if a landlord has received a surveyor’s report which concludes that any improvements would devalue the property’s market value by 5%; 
  • 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 exemption come with complex and ongoing conditions: they last for 5 years and require registration on the PRS Exemptions Register. Furthermore, if an exemption expires, landlords must comply with EPC improvements under MEES or register a new exemption.  

By law, properties with sub-standard ratings cannot be rented out. 

Why Compliance is Important  

Failure to comply with MEES will attract penalties. Financial penalties can range from £5,000 to £150,000. For instance, a breach lasting less than 3 months will attract a fine of £5,000 while the maximum fine for a breach lasting more than 3 months is £150,000. Furthermore, any misleading information provided by landlords on the PRS Exemption Register can attract a £5,000 fine. Additionally, there will be publications about landlords who fail to comply with MEES. Such publication may lead to reputational damage.  

Enforcement however is very low, as it’s understood the relevant authorities do not have the resources available to police compliance. This could of course change if the government chooses to prioritise enforcement. With this in mind, landlords must take action now if they have not already to improve sub-standard EPC ratings before 1 April 2023. Furthermore, landlords should note that the government aims to raise minimum EPC standards in the future. As a result, all commercial properties will need to have an EPC rating of C or higher by April 2027 and a rating of B or higher by 2030.  

 

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Disclaimer
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

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