28th March 2023
Minimum Energy Efficiency Standards (MEES) Update
From 1 April 2023, landlords must ensure that all rented commercial property has a minimum Energy Performance Rating (EPC) of E to comply with the updated Minimum Energy Efficiency Standard (MEES) Regulations.
What is the MEES scheme?
The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 establish a minimum level of energy efficiency for privately rented property in England and Wales, known as the minimum energy efficiency standards (MEES).
From 1 April 2018 it has been unlawful to grant a new tenancy to either new or existing tenants where a non-domestic property doesn’t have a minimum Energy Performance Certificate (EPC) of E, unless the property qualifies for an exemption which has been registered (see Exemptions below).
What is changing from April 2023?
From 1 April 2023, MEES will be extended to apply to all private rented commercial properties in England and Wales, even where there has been no change in tenancy arrangements.
The government has ambitions to raise the minimum level for non-domestic property further to EPC B by 2030, with an interim measure of EPC C by 2027.
What exemptions are allowed?
Exemptions can be applied in the following circumstances:
- Where a landlord can show that the cost of purchasing and installing improvements does not meet a simple seven year payback test.
- Where a landlord has made all the ‘relevant energy efficiency improvements’ that can be made, or there are none that can be made, and the property remains below EPC E.
- Certain energy efficiency improvements may legally require third party consent before they can be installed in a property. An exemption may be possible where consent was sought, refused or granted subject to a condition that the landlord was not reasonably able to comply with.
- An exemption will apply where the landlord has obtained a report from an independent surveyor who is on the Royal Institution of Chartered Surveyors (RICS) Register of Valuers advising that the installation of specific energy efficiency measures would reduce the market value of the property, or the building it forms part of, by more than five per cent.
- There is also a temporary exemption where a person has suddenly become a landlord. The Regulations acknowledge that there are some limited circumstances where a person has become a landlord suddenly and as such it would be inappropriate or unreasonable for them to be required to comply with the Regulations immediately.
What’s at stake for landlords?
Landlords whose properties don’t comply with the latest standards can face significant financial penalties of up to £150,000, as well as suffering reputational damage.
Landlords should urgently review their property to understand how they may be affected by these changes.
How Alder King can help
Working with our partners, Alder King can support landlords in ensuring their portfolios are MEES-compliant. We can help you understand the risk levels across your property portfolios, obtaining EPCs, exemption assessments and the procurement and management of improvement works.
For professional advice on your property, contact Adam Davies in our Facilities Management team.