A Landlord’s Guide to MEES: What is it, What are the Potential Fines and How Can You Comply

This is a featured post written by EPC For You.

In March of 2015, the Secretary of State for Energy and Climate Change approved new Energy Efficiency Regulations. These regulations are due to bring about a number of new standards, the most transformative of which is the Minimum Energy Efficiency Standards (MEES).

MEES is a new law that will introduce a new minimum energy efficiency rating for commercial buildings and domestic properties. At the moment, buildings have an energy efficiency rating that goes from A-G, with ‘A’ being the best performing and ‘G’ being the worst performing (information gathered from assessor EPC For You).

The new MEES law will introduce a minimum standard of E, meaning that buildings cannot be rented out unless they meet that require standard. The law will come into effect for new leases and renewals from April 1, 2018. From April 1 2023, this will apply to all leases.

The Minimum Energy Efficiency Standards law will impact a number of landlords around the country. With just under half a year remaining until the first part of the law comes into effect, it is essential that those who may be affected prepare themselves and their properties sufficiently. Here are some key changes that landlords can start making right now to ensure that they comply with the MEES law.

Firstly, it is highly advised that you order your property portfolio and see if any of your buildings are at risk of not meeting the new standards. The government have estimated that nearly 20% of buildings could be at risk, with some experts suggesting that number could be even higher.

Secondly, it is essential that you review your current leases. Provisions like rent reviews may not have been drafted with the new MEES law in mind and that is something that both landlord and tenant needs to be aware of.

Finally, plan your energy efficiency works should anything need doing. Make sure you get the best value by installing the energy efficiency works that are going to add value to your property and make sure that you complete these works at the right time so that you aren’t losing money. Other industries are very aware of the upcoming law changes and will consequentially raise their prices significantly towards the date of effect.

If these changes aren’t adhered to, there is a serious risk of a loss of income if your properties are not permitted for rental.

The MEES regulations will be imposed by Local Weights and Measures Authorities. They will have the power to impose civil penalties, all of which are measured against the property’s value.

For example, if a property is rented for three months or less and is in breach of MEES regulations, a fine of the equivalent value of 10% of the property’s rateable value will be enforced. This penalty is subject to a minimum fine of £5000 and a maximum of £50,000.

If, after three months of rental, the property still fails to meet MEES standards, the penalty will rise to 20% of the rateable value. A £10,000 minimum fine and a £150,000 maximum fine will be in effect here. However, these fines will not override the lease between the landlord and tenant.

If a landlord is concerned about their energy efficiency ratings in their properties, there are a number of specific works they can do to ensure that all ratings are way above the required E rating.

Firstly, ensure that your loft insulation is, at the very least, 270mm in depth. Many older buildings will simply not have this depth of insulation, and this can make a phenomenal difference to the efficiency of property energy. If you discover that insulation is lower than 90mm, you can apply for funding to have the loft insulation depth increased.

Another very simple and cheap way of ensuring that your properties reach the required standards is to change any halogen or high energy lights with LED’s or Low Energy Lighting.

Ensure that the central heating systems in your properties are efficient, specifically the boiler. An ageing, underperforming system could have a hugely negative effect on your energy efficiency rating. While this is a fairly expensive undertaking, the finances pale into insignificance when compared to the potential fines that will be imposed if any properties are below an E rating come April next year.

It is also essential that any cavity walls are insulated fully. This is a very easy way of ensuring that your buildings meet the required standards. Much like roof insulation, funding is also available for this task, if insulation is under a certain depth.

Finally, it may be time to consider renewable technologies such as solar panels. The initial expense of these additions will be high, but in the long run, the amount of money you will save will make it worthwhile. Any technologies like these will also increase your Energy Efficiency Rating like no other change.

hbspt.cta.load(2646356, 'adf3edbe-f3da-468f-afdf-168f2aecc896', {}); // ]]>

Capital at risk