From 1 April 2018, under The Energy Efficiency (Private Rented Property) Regulations 2015 (the MEES Regulations) it will be unlawful for a landlord to grant a new tenancy of a property with an EPC rating of below E (a sub-standard property) unless an exemption applies and has been validly registered.
What if the term commencement date is earlier than the 1 April 2018 deadline? Will this mean that the landlord is not in breach?
Will a lease that is completed after 1 April 2018 but contains a term commencement date of before 1 April 2018 be within the scope of the MEES Regulations?
The short answer is "yes". The prohibition is on granting new tenancies of sub-standard properties on or after 1 April 2018. It does not matter when the term is stated to commence. Therefore, if a lease is granted on 2 April 2018 with a term commencement date of 2 January 2018, the landlord will still need to comply with the MEES Regulations.
Landlords of sub-standard properties who are in the process of negotiating leases now may wish to hurry things along so that completion of the lease takes place prior to 1 April 2018 deadline.
However, even if the lease is completed before 1 April, energy efficiency cannot be completely disregarded. From 1 April 2020 (for domestic properties) and 1 April 2023 (for non-domestic properties), the prohibition on continuing to let a sub-standard property will come in. Therefore, if there is a valid EPC in place on 1 April 2020 (for a domestic property) or 1 April 2023 (for a non-domestic property), and this shows that the property is sub-standard, the landlord will need to show and register an exemption. If it does not, it will be in breach of the MEES Regulations and could be fined. These fines can be substantial, both in monetary terms and also in relation to reputational damage.