Minimum Energy Efficiency Standards
The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 have been introduced to improve the energy efficiency of the UK’s existing building stock.
Under this legislation non-domestic private rented properties are required to qualify to minimum energy standards (MEES) as rated by each building’s Energy Performance Certificate (EPC).
The requirement for compliance with the MEES is triggered by the legal requirement for an EPC.
There will be no need to comply with the MEES if it is demonstrated that the building in question is exempt from the requirement for an Energy Performance Certificate (EPC) under current legislation.
An EPC that has been obtained voluntarily (i.e. without legal obligation under the EPC legislation) will not normally trigger MEES compliance.
Qualifying buildings with an EPC Asset Rating in the F & G Bands are considered sub-standard and must be upgraded.
From 1 April 2018 it will be unlawful to grant a tenancy to new or existing tenants for buildings in the F & G Bands.
Landlords will need to ensure compliance with the regulations before a lease is granted. The regulations apply to sub-lettings and assignments.
From 1 April 2023, all non-domestic, let properties must have an EPC rating of E or better including those where a lease is already in place.
When an EPC has expired on a building and the tenant remains in occupation, due to the lease term extending beyond the EPC expiry date, then there is no requirement for a new EPC and the MEES regulations do not apply.
It is important to note that not all listed buildings are exempt from the requirements for an EPC. The treatment of Listed Buildings under current legislation is ambiguous and the EPC exemption hinges on the application of energy saving measures unacceptably altering the character or appearance of the building.
This review only covers commercial properties however the MEES also apply to residential properties.
A number of temporary exemptions, with a five year validity, are indicated below:-
- The costs of implementing individual building improvements should not exceed a simple payback period of 7 years. Building improvements which have payback periods exceeding 7 years are considered disproportionate and exemptions may be claimed on this basis.
- Consent to undertake the energy efficiency measures is refused by a third party e.g. Tenant, Superior Landlord or Local Authority.
- Where a landlord obtains a written report from a suitably qualified expert stating that installing the energy efficiency measures will decrease the capital value of the property by more than 5%, or that the proposed measures e.g. cavity or solid wall insulation are unsuitable for the building.
Exemptions must be lodged on a central register with supporting evidence by 1 April 2018. Registration does not attract a fee or charge. Exemptions are made on a self-certification basis with enforcement authorities undertaking monitoring and auditing. Exemptions claimed by a landlord will not pass over to a new landlord who acquires the property on sale.
Enforcement and Penalties
The regulations will be enforced by Trading Standards Officers. Penalties can extend to £150,000 based upon the rateable value of the property and the length of the breach.
Official guidance provided by the Department for Business, Energy & Industrial Strategy. Visit https://www.gov.uk/government/publications/the-non-domestic-private-rented-property-minimum-standard-landlord-guidance . The Guidance Document available from this website, or on request to Michael Carr Consultancy, highlights that guidance is not legally binding and concerned parties should seek professional, independent legal advice.
How can Michael Carr Consultancy assist?
Michael Carr has over 25 years of experience in the construction industry and is a Chartered Building Services Engineer. As a CIBSE registered Low Carbon Consultant he has been providing non-domestic EPCs since their inception in 2008. He can deliver a full MEES compliance service incorporating:-
- Advice on the interpretation of the MEES Regulations
- Re-assessment of existing EPCs.
- Registering exemptions with supporting evidence.
- The development of a cost effective plan to raise the EPC Asset rating of a subject building from the F or G Band to E or better.
- Specifying energy efficiency measures including Builder’s works and Mechanical & Electrical Services in order to seek competitive tenders.
- Advice on energy efficient products qualifying for Enhanced Capital Allowances under the Government’s Energy Technology List. Visit https://www.gov.uk/guidance/energy-technology-list
- Supervising the installation of recommended energy efficiency measures.
- Lodgement of new EPCs following implementation of energy efficiency measures.