On 1st April 2018, the MEES regulations came into force and had significant implications for landlords of private rented properties. The government-mandated regulations aim to increase the general energy efficiency of buildings rented out privately by setting a minimum energy efficiency level for domestic private rented properties.
It was deemed unlawful to let properties with an Energy Performance Certificate (EPC) rating below an 'E' rating, so an F or G Energy Performance Certificate (EPC) rating.
Energy Performance Certificate
EPC is a tool to evaluate how energy-efficient residential properties are. They are necessary when renting or selling a house and give the buyer or tenant a general overview of the property's energy efficiency and operating costs.
If you rent a property below E you must improve the property's rating or register an exemption.
If local authorities serve you with a compliance notice and a breach of minimum energy efficiency standards regulations has been confirmed, you could be charged up to £5,000.
What does this mean for landlords?
MEES regulations will apply if you let on an assured, regulated or a domestic agricultural tenancy or if you
Landlords will need to take action to ensure they are compliant and avoid any penalties. If a property does not meet the minimum standards, it will be deemed unlawful for landlords to let or market their property.
Energy efficiency improvements
You won't ever have to spend more than £3,500 (including VAT) on energy efficiency upgrades.
If it costs more than £3,500 to bring your property up to EPC E, you should make all the changes that are possible up to that amount before registering an "all improvements made" exemption.
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Ways in which you can make energy efficiency improvements
Making energy efficiency improvements can improve the energy efficiency rating, making your property more attractive to potential tenants as it will provide a financial savings in utility bills.
Loft Insulation - is a relatively affordable energy efficient measure that can be implemented to reduce your energy bills as it prevents the heat from escaping and increases the value of your home.
Double glazing - double glazed windows are significant in providing energy efficiency by reduce heat loss as well as condensation which can lead to damp and mould. Double glazing has many other benefits such as increased security and noise reduction.
Solar panel - solar panel can be expensive however they produce cheaper, greener energy. They improve the energy efficiency of your home by providing a renewable source of energy rather than relying on gas and electricity.
There are a few exemptions of renting out a property with an EPC rating below E. If any of the below apply you can register the exemption provided you meet the criteria.
‘High cost’ Exemption
If the cost of even the smallest suggested energy efficiency measure would be more than £3,500, the restriction against renting out property with an EPC rating or lower does not apply.
‘All Improvements Made’ Exemption
This exemptions refers to a scenario where you have performed all relevant energy efficiency improvements yet the EPC still remains under a rating of E.
In some cases, third party consent will be required to conduct any of the relevant energy efficiency improvements. You must provide evidence that the improvements necessary required third party consent which was sought and rejected.
‘Wall Insulation’ Exemption
When the landlord has obtained expert advice indicating that the measure is not suitable for the property because of its potential adverse impact on the property, it may include cavity wall insulation, external wall insulation, or internal wall insulation.
If you find yourself with an energy performance rating below E and constrained by one of the exemptions suggested by the government you must register this with PRS Exemption Register with evidence to support this. exemptions will last for 5 years.
The government lists around 7 different exemptions, for more information regarding MEES exemptions please see click here.