• 3 min read

EPCs and MEES Regulations: what landlords need to know

EPCs and the MEES Regulations

The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, or “MEES” Regulations for short, are Government regulations in place to ensure that let properties meet a minimum level of energy efficiency. The MEES Regulations have applied to new leases since April 2018 but changes are coming into effect on 1 April 2023 so that the Regulations will apply to existing leases in addition to new leases.

As things stand, to comply with the MEES Regulations, properties must not be let if the property has an Energy Performance Certificate (“EPC”) rating lower than an E rating (unless there is a legitimate reason under the Regulations not to make energy efficiency improvements to the property). However, as of 1 April 2023, landlords of rented properties will be in breach of the Regulations if any existing leases are in place of properties with an EPC rating less than E (again, unless an exemption applies).

As noted, there may be exemptions applicable which enable a landlord to let / continue to let out a sub-standard property without any risk of enforcement action. The exemptions which are most likely to be applicable are:

  • Consent exemption – the landlord is unable to obtain necessary consent to carry out improvement works. This could be consent from a tenant (where, under the terms of the relevant lease, the tenant’s consent is required) or from a third party such as a planning authority. This exemption is often why listed buildings do not need to meet this minimum level of energy efficiency (although landlords should still obtain EPCs for listed buildings to establish what energy efficiency improvement works may be required and to ascertain if such works require listed building consent).
  • Devaluation exemption – if a landlord has not increased the EPC rating to the minimum level because doing so would result in a reduction of more than 5% of the value of the property, there is a valid exemption available. To comply with the requirements of this exemption, the landlord must have obtained a report from an independent surveyor which states that making the relevant energy efficiency improvement would result in a reduction of more than 5% in the market value of the property.
  • Temporary exemptions – in certain cases, a landlord will have six months before any enforcement action can be taken if they are in breach of the MEES Regulations. The most likely scenario is if a landlord purchases a sub-standard property which is subject to an existing lease. This could result in the buyer immediately being in breach of the Regulations. However, the Temporary exemption will allow the buyer a period of six months to assess the situation / improve the energy efficiency of the property prior to running the risk of enforcement action. 

All exemptions must be noted on the PRS Exemptions Register before they can be relied upon. As such, landlords who intend to rely on exemptions should take steps now to get their relevant exemption noted on the Register. As part of this process, the landlord must provide relevant information. For example, to note a Consent exemption, a landlord must confirm what consent was required and confirm that such consent was either refused or granted subject to unreasonable conditions.

Further changes are planned; the minimal acceptable EPC rating of E is scheduled to be increased to C in 2027 and then to B in 2030. Whilst it is not guaranteed that these changes will be implemented, it does show the government’s intentions to ensure all properties reach a high level of energy efficiency. With new leases, landlords should consider the potential impact of increases to the minimum EPC rating; provisions in new leases allowing the landlord to carry out any necessary energy efficiency improvement works and potentially share the cost of such works with the tenant could be very beneficial to landlords.

For further information about EPCs and the MEES Regulations, please contact the commercial property team on 023 8032 1000 or get in touch here.

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