Update on Minimum Energy Efficiency Standard

Whilst notable changes have been made to legislation surrounding residential tenancies over the previous few weeks in light of the coronavirus crisis, one thing that has not changed is the rolling out of the Minimum Energy Efficiency Standard (MEES) regulations requirements on 1 April 2020.

Previously, the requirements applied only to tenancies granted on or after 1 April 2018. Now all properties let under an assured shorthold tenancy, regulated tenancy or domestic agricultural tenancy will require an Energy Performance Certificate (EPC) rating of E or above. There are a limited exemptions available but for each exemption certain criteria must be satisfied and an application would need to be made to register the exemption. 

If you are a landlord and the property you let out is rated F or G, you will need to make immediate improvements to the property in order for it to reach the minimum rating of E. Your EPC report will give you an indication of what needs to be done. You will not be required to spend more than £3,500 (including VAT) on the property which is the ‘costs cap’. You should therefore make every improvement possible within the costs cap of £3,500 and if the property remains rated at below E, you should apply for an ‘all improvements made’ exemption. 

Where landlords struggle to obtain access to the property due to their tenant or are unable to get the appropriate consent from a third party, such as their mortgage lender, a landlord may be able to register a ‘Third Party Consent’ exemption. This can be registered where the landlord can prove that despite its best efforts, they have been unable to undertake the necessary improvements to increase the rating of the property. This exemption lasts five years or, where lack of consent by the tenant was the issue, the exemption lasts until the tenancy ends. 

If a property fails to meet the minimum rating and a valid exemption is not registered on the Government Private Rented Sector Exemption Register:

1. the Local Authority may take enforcement action including imposing fines of up to £4,000 where the property has been let out to tenants in breach of the MEES regulations for a period of three months or more; and
2. the landlord will be unable to serve a Section 21 notice seeking possession which could cause significant problems for the landlord in obtaining vacant possession of its property. 

Landlords must also ensure that the relevant EPC is in place before a tenancy commences, to ensure compliance with the MEES regulations. 

If you have any queries about matters mentioned in this article then please contact Alice Harris, or any other member of the Property Litigation Team who would be happy to provide additional advice relating to your specific circumstances.