MEES - A year on
Following on from our previous article on MEES, below is an update now we’re just over a year on from the implementation of the first minimum threshold.
What are MEES?
MEES stands for the Minimum Energy Efficiency Standards, which were introduced by the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.
In short, MEES prevent landlords from letting space in a commercial building if the energy performance certificate (“EPC”) for the building is F or G – unless an exemption applies.
The exemptions include:
• an independent assessor determines that improvements to the property would not pay for themselves through energy savings within 7 years (“the seven year exemption”);
• an independent surveyor determines that the improvements that could be made to the property are likely to reduce the market value of the property by more than 5%; and
• where third party consent (e.g. from the tenant or planning authority) has been refused or unreasonable conditions have been imposed.
All exemptions must be registered on the central government PRS Exemptions Register and are valid for five years.
Has it been successful?
Leasing sub-standard properties (i.e. those with F or G ratings) has been banned since April of last year. Over a year on, recent surveys have shown that MEES have been very successful in their impact. Before April 2018, 16.4% of all EPC’s fell within the F & G categories - after MEES only 4% of all new EPC certificates were F or G.
The biggest drop has been in London where, pre-MEES, F & G properties made up 17.3% of the city’s total property portfolio, and post-MEES that figure has fallen to 3.5%.
How are MEES being enforced?
MEES are enforced by Local Weights and Measures Authorities, and these enforcement authorities have the power to impose civil penalties which range from £5,000 to £150,000.
However, over one year on from the introduction of MEES, and despite the successful impact MEES has had, there have been no enforcements by the enforcement authorities against any landlords. One enforcement authority has revealed the reason for this is that there is confusion regarding the seven year exemption. Until now, it has not been clear how much landlords ought to pay for all of the improvements, so they have successfully been relying on the seven year exemption and authorities have been hesitant to take enforcement action.
Despite this relative “wild west” moment, this period is now likely to end. As of April 2019, the government has given the enforcement authorities guidance, and has confirmed that landlord’s are expected to pay up to £3,500 to improve buildings with F or G ratings.
This coupled with the fact that after 1 April 2023, landlords must not let any buildings which have an EPC rating of less than E, means that it is likely there will be a lot more enforcement occurring – so watch this space.
If you have any queries regarding anything touched on in this article, or if you would like further information, please contact Nick Ripper, or give us a call on 0345 070 6000.
This article was prepared by Harnaek Rahania.