We wrote last year about the Minimum Energy Efficiency Standards (MEES) that are being brought in by the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015. These Regulations will require landlords to ensure their properties reach certain standards in energy efficiency. With the first deadline of 1 April 2018 fast approaching, we recap on the requirements for landlords, and what happens if you don’t comply.
While the Regulations bring in changes to both residential and commercial landlords, the changes are slightly different. This article looks at the residential landlords. You can read about the changes that will affect commercial landlords here.
Who do the regulations apply to?
In short, residential private rented properties in England and Wales. It will apply to all Assured Shorthold Tenancies (ASTs), as well as other types of domestic tenancy agreements.
Some buildings will be exempt. These include:
- some temporary buildings
- properties intended to be used for less than four months of the year
- especially small buildings
- listed buildings and other officially-protected buildings may also be exempt (where making changes would unacceptably alter the property’s character or appearance).
What must residential landlords do to comply?
Landlords must ensure that their rental properties have an EPC rating of E or higher. Landlords will be prohibited from letting out properties with an F or G rating.
Therefore, landlords must carry out energy efficiency improvements to bring the property up to at least an E rating.
What changes must be made?
Landlords must make appropriate, permissible and cost-effective improvements. If they can provide evidence, they may be eligible for an exemption from reaching the minimum standard. For example, where:
- the landlord has carried out cost-effective improvements, but the rating remains F or G.
- the landlord requires consent to carry out works to the property, but the occupying tenant or freeholder withholds that consent.
- Making the improvements would cause the property value to decrease by over 5%. A surveyor would have to give evidence on this. Any measures that are expected to cause this devaluation would be exempt.
If landlords are looking to grant a new tenancy to a new tenant, or a new tenancy to an existing tenant (including extensions or renewals), they will need ensure their properties are up to scratch by 1 April 2018.
From 1 April 2020, the regulations will apply to all privately rented property.
Your rental property currently has an F rating. There is a tenant in place, and the tenancy is due to expire in January 2021. While you do not need to be concerned about making the improvements just yet, but will need to make sure you bring the property up to an E by 1 April 2020.
What happens if I don’t comply?
Where a local authority suspects that a landlord has not complied (or indeed, has not obtained an exemption), they can serve a compliance notice on the landlord, requesting further information. If the information is not provided, or is not sufficient to confirm compliance, landlords can be fined up to £4,000, depending on the offence.
What should residential landlords do now and how can we help?
We would advise all landlords to consider their properties carefully. Not only will you face penalties for failing to comply, but you also risk loss of rental income if your property does not meet the requirements.
Even if you aren’t looking at letting out or renewing a tenancy in the next few months, it may be worth reviewing your property portfolio now in any case. Look at:
- The EPC rating for each property
- When are your properties due for renewal?
- Do any of them require works to be carried out?
- Do any exemptions apply?