Overview: Minimum Energy Efficiency Standard
Region
England & Wales
The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 establish minimum energy efficiency standards (MEES) for rented properties. These regulations aim to improve energy efficiency in non-domestic properties and reduce carbon emissions. Here is a detailed summary of the requirements, exemptions, and enforcement mechanisms under the regulations.
Key requirements and deadlines of MEES
Initial Requirement (2018)
From 1 April 2018, landlords of non-domestic properties were prohibited from granting new tenancies or renewing existing ones if the property had an Energy Performance Certificate (EPC) rating below E, unless a valid exemption was registered.
Expanded Requirement (2023)
This requirement was extended to all privately rented non-domestic properties, regardless of tenancy changes, from 1 April 2023.
Empty Properties
No action is required for unlet properties until the owner plans to rent them out. However, an EPC is required when marketing an unlet property.
Determining Coverage Under the Regulations
The regulations apply to all non-domestic rented properties legally required to have an EPC, typically including properties marketed for sale or modified within the past 10 years.
Exceptions include
- Short-Term Tenancies: Leases with terms not exceeding six months (unless renewable or the tenant has occupied the property for over 12 months).
- Long-Term Tenancies: Leases granted for 99 years or more.
To determine if a property is covered by the MEES regulations
- Confirm it is non-domestic.
- Verify if an EPC is legally required.
- Ensure the lease term is between six months and 99 years.
If all conditions are met and the property has an EPC rating of F or G, landlords must take action to improve its energy efficiency.
Energy Efficiency Measures and Exemptions
Cost-Effective Energy Efficiency Measures
Landlords are encouraged to undertake improvements to achieve the highest possible EPC rating within cost-effective means. If measures are not financially viable, an exemption may be claimed under the "7-year payback test." This test requires demonstrating that the expected energy savings over seven years do not cover the installation costs.
Exemptions to MEES
- 7-Year Payback Exemption
Applicable if improvement costs fail the 7-year payback test. This requires:
Quotes from qualified installers.
Cost calculations demonstrating non-viability.
Validity: 5 years.
- All Improvements Made Exemption
For properties where all possible energy efficiency measures have been implemented, but the EPC rating remains below E. Supporting evidence includes:
EPC details.
Relevant reports.
Validity: 5 years.
- Wall Insulation Exemption
Granted when recommended insulation measures could harm the property’s fabric. Requires:
Expert advice supporting claims.
Validity: 5 years.
- Third-Party Consent Exemption
Applicable if necessary, consents (e.g., from tenants, freeholders, or planning departments) cannot be obtained. Documentation must include:
Correspondence or refusal notices.
Validity: 5 years or until tenancy changes.
- Property Devaluation Exemption
If improvements devalue the property by more than 5%, as evidenced by an independent RICS surveyor’s report.
Validity: 5 years.
Temporary Exemption for New Landlords:
Applies for six months following the acquisition of a property under qualifying circumstances.
Registering an Exemption
To register an exemption, landlords must:
Create an account on the Private Rented Sector (PRS) Exemptions Register. You need to provide:
- Property address.
- Type of exemption.
- Valid EPC and supporting evidence.
Exemptions expire after their respective validity periods, requiring landlords to reattempt improvements or renew the exemption.
Enforcement and Penalties
Local Weights and Measures Authorities enforce the regulations. Non-compliance may result in a compliance Notice.
Authorities may request documentation (e.g., EPC, tenancy agreements, energy improvement records) to investigate potential breaches.
Penalties for Breaches
These include letting properties in violation of regulations, providing false information, or continuing to let non-compliant properties after April 2023.
Further Information
The Non-Domestic Property Guidance for Landlords, provided by the Department for Security and Net Zero, provides comprehensive guidance, including technical and legal details. For assistance with exemptions or inquiries about the regulations, landlords may contact the digital helpline or seek independent legal advice.
Parties should seek legal advice from their solicitor.
