(Minimum Energy Efficiency Standards)

All The Details

MEES is coming from April 2018. Are you ready for it? What is it and how can you ensure you comply with the legislation.

Private Rental Sector (PRS) properties must achieve at least an "E" rating when a new tenancy starts or tenancy is renewed.

From April 2020 all PRS properties must achieve a minimum of "E" rating on an Energy Performance Certificate (EPC)

Understanding the Legislation and Regulations

The Regulations were published in February 2015

This was following a consultation of the industry that ended in September 2014
The Regulations were put in place to meet Government obligations set out in the 2011 Energy Act
They are set up to improve the energy efficiency of privately rented sector (PRS) property • Both domestic and non-domestic rented properties are included
However, whilst the principles are the same, there are some differences.

Drivers behind Energy Efficiency Regulations

Tenants have less control over the properties that they live in.
PRS property tends to be lower rated and more likely to be F and G rated
The PRS sector is growing fast. It has doubled in size in a decade

Below are links to the regulations:

MEES Consultation

Government Responce to MEES Consultation

MEES Regulations

These regulations apply to the Domestic private rented sector in England and Wales ONLY.
However the Welsh Government may have their own angle on the regulations and may wish to adopt them or alter them.
Welsh landlords MUST have a licence awarded to them by the local authority, to allow them to rent out properties. It may be that MEES forms part of the licence.
Scottish Government are looking at the regulations, but have their own energy regulations in the form of Section 63 and Section 64.
In Scotland, The Climate Change (Scotland) Act 2009 commits to improve domestic (Section 64) and non-domestic buildings (Section 63)
Regulations introduced for Non Domestic on 1 Sept 2016 - Section 63
Applies only to buildings >1,000m2 being sold or rented to a new tenant
No minimum rating introduced – an ‘Action Plan’ or DEC to be produced
There will be a consultation on domestic buildings to be issued this year, which all interested parties can respond to.
Domestic dwellings let on tenancies of less than 6 months or of 99 years or more are excluded. • All types of domestic property are included except those excluded from having an EPC
Places of Worship used for religious activitiesBuildings/dwellings that are of historical significance*
Temporary buildings with a planned time of use of two years or less • residential buildings which are intended to be used less than four months of the year
The government now seem to be considering listed buildings as being inside the scope – but there is debate.

Exemptions

Landlords will be eligible for exemptions from reaching an E rating where they can evidence;

The measure are not cost-effective – on a 7 year payback or under the Green Deal Golden Rule (pay for the improvement via savings generate over he lifetime of the improvement)
The Landlord cannot obtain necessary consents to install the improvements (from tenants, lenders or superior landlords)
A suitably qualified expert provides written advice that the measure would reduce the properties value by 5% or more, or that wall insulation will damage the properties structure.

The exemptions are valid for five years only and cannot be transferred to a new landlord

Enforcement

The MEES Regulations will be enforced by Local Weights and Measures Authorities (LWMAs)

To avoid enforcement, Landlords will need to do one of the following;

Ensure that a valid EPC is in place for the property • That the EPC shows that the property achieves an ‘E’ rating or better. • Where the property has not achieved an ‘E’ rating, an exemption is uploaded to the register with sufficient evidence as to why the exemption is applicable.

LWMAs can serve a compliance notice on the landlord if they do not agree or feel insufficient evidence is supplied on the PRS register.

Ultimately the LWMAs may issue a penalty notice (a fine)
These are potentially very costly to a landlord
Where a property is let in breach of the MEES Regulations or where a penalty is imposed, the lease as between the landlord and the tenant remains valid and in force

LWMAs will have powers to impose civil penalties which are set by reference to the property's rateable value.

The penalty for renting out a property for a period of fewer than three months in breach of the MEES Regulations will be equivalent to 10% of the property’s rateable value, subject to a minimum penalty of £5,000 and a maximum of £50,000. After three months, the penalty rises to 20% of the rateable value, with a minimum penalty of £10,000 and a maximum of £150,000.

Where a property is let in breach of the MEES Regulations or where a penalty is imposed, the lease as between the landlord and the tenant remains valid and in force.


How This Affect Landlords

Landlords can prepare now by:

Auditing their portfolios to understand which properties are within scope of the MEES Regulations and whether exemptions might apply
Carrying out EPCs to ensure that each property has the most up to date information and rating.
There are changes to RdSAP in October 2017 (approx.)
This will also allow a landlord to see a problem property before MEES begins in April 2018
Looking at lease terms, renewals dates to prompt when a property will next be marketed or tenancy is renewed.
Reviewing their leases to understand their rights

How This Affects Managing Agents

Similar to landlords, Managing Agents are responsible for the ongoing management and maintenance of properties.

A managing agent should also be preparing now by auditing properties that they are managing to identify those which may be within scope of the MEES Regulations, and when tenancies are due to end after April 2018.
They should consider the age of the EPC
If any work has been done to the property following the issue of the EPC
And get EPCs updated in time for 2018 so they can assesses any improvements
It takes time to seek consent

Funding Improvements

There is funding and support for Landlords to improve the efficiency of their properties;

ECO Funding – Energy Companies Obligation
RHI – Renewable Heat Incentive
FIT – Feed in Tariff

In addition, most local authorities have some form of grants or funding schemes.
A replacement for Green Deal is also underway.

ECO Funding – Energy Companies Obligation

This is probably the most important and useful funding scheme.
It is focused on bring people out of fuel poverty. It changed in April 2017 and some of the criteria has changed from the previous scheme.
Criteria is based on occupiers earnings and if they claim qualifying benefits.
Also based on location of the property.
Energy companies will manage the scheme. Contact any of the big six energy providers.

RHI – Renewable Heat Incentive

This allows a property owner to pay for a renewable heating system over a period of 7 years
Drastically reduces the cost of installing a new heating system in most cases it covers the total cost. Pay back is usually less than the 7 years that the payment runs for.
Needs an EPC for application
Air Source Heat Pumps, Ground Source Heat Pumps & Biomass Heating are all applicable measures.

FIT – Feed in Tariff

This allows a property owner to pay for an electric generation system over a period of 20 years.
Drastically reduces the cost of installing a new system and in most cases it covers the total cost.
Needs an EPC for application.
Solar PV, Wind turbines, & Micro CHP are all applicable measures.

Green Deal Finance

The Green Deal was an ‘Able to pay’ finance mechanism.
GOLDEN RULE
Green Deal finance and funding ended in 2016
The government are now allowing private finance companies to offer a replacement to Green Deal
This is likely to be in place by the end of 2017.

Order your EPC (Energy Performance Certificate) from Energy Surveys North East and if the property is less than a "D" rating I will not "lodge" the EPC but will inform you and if you wish I will prepare a report as to the moct cost effective measures that can be taken to attempt to achieve the required result. After these measures are completed I will return to the property and "re-do" the EPC taking photographic evidence to support my findings.

Obviously there will have to be charges in addition to my normal fees as two visits to the property will be required and there is additional time spent performing the calculations to RdSAP to find the "required measures"

If I cannot find a way to achieve a minimum of an "E" rating then my standard charges will apply.

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