The Minimum Energy Efficiency Standards (MEES)
come into effect from 1 April 2018.
From this date, a landlord will be unable to grant a new lease of a commercial (or residential) property with an Energy Performance Certificate (EPC) rating below “E” unless an exemption applies.
From 1 April 2023, a landlord will be unable to continue to let a commercial property that has an energy rating below an E.
Commercial landlords therefore need to take steps to assess and if necessary improve the EPC ratings of their properties.
There are many ways to increase energy performance and some are simpler and less expensive than others.
Exemptions to The Minimum Energy Efficiency Standards
The exemptions are set out in the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 and the key exemptions are where:
- The lease has a term of less than 6 months.
- All cost-effective improvements, i.e. works that would pay for themselves through energy savings within seven years, have been undertaken, or there are no such works that could be done.
- The landlord is unable to obtain third party consent to the improvements. This includes the consent of a tenant to enter the property to carry out improvement works.
- An independent surveyor determines that the energy efficiency improvements would devalue the property by more than 5% or would damage the property.
What Does This Mean For Older, Less Efficient Properties?
On the face of it, The Minimum Energy Efficiency Standards put landlords in jeopardy of owning properties that they might not be able to rent out.
In reality, there are many ways to make efficiency savings and a list of recommendations will appear in the EPC report.
The EPC report and its recommendations are produced by software that does not really take into account the economics of the building, so often, it will include recommendations that are not entirely practical from both a physical and a financial perspective.
Usually, quick gains in energy efficiency can be made by updating lighting systems and using low energy lighting throughout. Sometimes, just this action could take a building from a G rating to an E, so disregard the doom-mongers who tell you you will have to change your roof and cladding, or install expensive photovoltaic, or heat pump systems.
Easy gains can also be made by upgrading inefficient boilers or adding a layer of insulation to the roof.
Whilst we do not conduct EPC surveys, we are happy to advise landlords on general refurbishment issues that also take into account the new regulations to provide not only a more valuable building, but also a more economical one for tenants to occupy.
Please call us on 0121 711 7110 for further information.