Minimum Energy Efficiency Standards (MEES) 2018
From the 1st April 2018 there will be requirement for any privately rented properties to have a minimum energy performance rating of E detailed on the Energy Performance Certificate (EPC). The regulations will apply for new lets and renewals after the 1st April 2018 and for all existing tenancies after 1st April 2020.
It will be unlawful to rent a property with an Energy Rating of F and G unless there is an applicable exemption (see below). Properties with an energy rating of F or G will be deemed to be substandard (unless an exemption exists) and the legislation prohibits landlords from letting substandard properties.
A civil penalty of £4000 will be charged for breaches of the legislation.
The rules apply to all AST’s in the England and Wales as well as regulated tenancies, protected tenancies, and assured agricultural tenancies. The scope also extends to all commercial properties.
No changes have been made to the provision for EPC’s which is a requirement for almost all (see below for exemptions) residential and commercial property that is either let or sold. New EPC’s are not required to be carried out and existing EPC’s are to be relied upon provided they are no more than 10 years old (at which point they must be renewed, which lasts for a further 10 year period).
Buildings currently exempt from EPC and MEES requirements
- Temporary buildings with a planned use of 2 years or less
- Protected buildings and monuments including some Listed buildings
- Residential buildings that are intended to be used for 4 months or less per year
- Stand alone buildings with a total usable area of 50 square metres or less
Exemption to reaching the minimum standard exist to Landlords where they can provide evidence for at least one of the following circumstances:
- The landlord requires consent from the tenant to make necessary improvements, and the tenant withholds that consent
- The landlord is required by a contractual or legislative obligation to obtain consent by a third party and such consent is withheld, denied, or given but with unreasonable conditions
- The Landlord has undertaken cost effect measures to make the improvements, but the energy rating remains below E
- The Landlord is unable to install cost effective measures without upfront costs because the funding entails Green Deal Funding and they or their tenants fail their credit checks
- There will be no requirement to install wall insulation, where the Landlord has obtained advice in writing from a suitably qualified person, that such installation would negatively impact the fabric or structure of the building
- If, in the opinion of Royal Institute Of Surveyors (RICS), measures to improve the energy rating sufficiently would cause the capital value of the property to fall by 5% or more. However only the measures causing the depreciation would be exempt from installation
- For an exemption to be recognised it must be notified to the PRS Exemptions Register which will be operated by the government. The Enforcement Authority will be entitled to request that Landlords provide them with the evidence for a claim that supports exemption.
Penalties, Reviews, and Appeals
The maximum cumulative penalty for a single offence is £5000. Fixed fee penalties may be charged for non compliance from either the local authority or from the PRS Exemptions Register as well as publication of non compliance.
A Landlord may request a review of the local authority’s decision to serve a notice. Local authorities must consider any representations made and all the evidence to decide whether a penalty charge would be made. Appeals may also be made on penalty notices and this would be heard at First Tier Tribunal.
Improvements that can be made or required
The following options are available to Landlords wishing to improve the energy efficiency of their properties:
- Air source heat pumps
- Thermostat boilers
- Thermostat room heaters
- Cavity wall insulation
- Solid wall insulation (internal or external)
- Cylinder thermostats
- Draught proofing
- Duct insulation
- Hot water showers/systems (efficient)
- Hot water taps (efficient)
- External wall insulation systems
- Fan assisted replacement storage heaters
- Flue gas recovery devices
- Ground source heat pumps
- Heating controls (for wet central heating systems and warm air systems)
- Heating ventilation and air conditioning controls
- High performance external doors
- Hot water controls (including timers and temperature control)
- Hot water cylinder insulation
- Internal wall insulation (or external walls)
- Lighting systems fittings and controls (including roof lights, lamps and luminaires)
- Loft or rafter insulation (including loft hatch insulation)
- Mechanical ventilation with heat recovery
- Micro combined heating power
- Micro wind generation
- Pipework insulation
- Gas fired condensing boilers
- Replacement glazing
- Oil fired condensing boilers
- Warm air units
- Radian heating
- Roof insulation
- Warming roof insulation
- Ceiling improvements (including duct ceiling)
- Secondary glazing
- Solar water heating
- Solar blind, shutters and shading devices
- Transpired solar collectors
- Under floor heating
- Under floor insulation
- Variable speed driers for fans and pumps
- Waste water heat recovery devices attached to showers
- Water source heat pump
Important final note
Research has also identified that energy performance certificates (EPCs) understate the thermal efficiency of solid walls. Many PRS properties have solid walls. Usually they were built pre-1918 but can be later. Again the Government are proposing to recalibrate EPCs to give a truer reading. This could mean that some solid wall properties currently rated F under an EPC will no longer require any work and less work may be required in the case of a G rated property. The Government has yet to bring forward the relevant regulations to implement these changes.
Landlords of F and G rated solid wall properties may therefore be advised to await developments. Should changes be made then a new EPC will be required. Existing EPCs cannot be adjusted. Once EPCs are recalibrated, in these cases, obtaining a new EPC may mean that you no longer need to comply with the Regulations or less work may be required.
If you would like to discuss the impact of the minimum energy standards for your rental property in advance of the 1st April 2018, please get in touch. We'd be happy to help you to review to your options and plan ahead.