A host of regulations have affected landlords and tenants of private rented properties in recent years. Whether you’re letting or renting, you also now need to be aware of Minimum Energy Efficiency Standards (MEES).
The domestic private rented sector in England and Wales represents 18 per cent of the housing stock with 4.2 million households and domestic buildings accounting for 25 per cent of the UK’s total carbon emissions in 2009. These regulations are part of the government’s drive to reduce greenhouse gas emissions by 80 per cent (compared to the 1990 baseline) by 2050.
When do MEES apply?
MEES affect various types of tenancy, including those granted under the Rent Act, as well as assured and assured shorthold tenancies. These kind of tenancies account for the vast majority of short term, private rented properties.
The MEES apply to all new tenancies granted from 1 April 2018 and will apply to all tenancies from 1 April 2020, regardless of start date.
MEES don’t apply if there is no valid Energy Performance Certificate (EPC) at the point when compliance with MEES is being assessed. If you don’t know whether the property has a valid EPC you should check the EPC register. A valid EPC should also be provided on the grant of most new leases. If you’re granting an assured shorthold tenancy and fail to provide an EPC, then there are significant implications for recovering possession.
How do MEES affect lettings?
MEES won’t permit lettings of “substandard” properties, rated F or G on their EPC, unless all “relevant energy efficiency improvements” are made. Regulations specify what is and what isn’t a “relevant energy efficiency improvement” and you should refer to the Green Deal report (contained in the EPC) or a surveyor’s report for more information. The intention is that energy efficiency improvements should be funded in one of four ways (at no cost to the landlord):
- Financed by central government, local authority or other third party.
- Wholly financed via a Green Deal plan.
- Provided free of charge under the Energy Company Obligation or similar scheme.
- A combination of the above.
It is possible, in various circumstances, to claim an exemption from the ban on letting “substandard” properties, which needs to be registered on the PRS Exemptions Register.
The new regulations also give tenants the right to request the landlord’s consent, which should not be unreasonably withheld, to make energy efficiency improvements to the property, regardless of any restrictions which may exist in the lease or tenancy.
What happens if you don’t comply?
Failure to comply does not mean that any tenancy granted is invalid. Local authorities are responsible for enforcement which can include compliance notices and penalty notices. These are civil (not criminal) penalties. There will be a maximum cumulative fine of £5,000 per breach per property and a right of appeal to the First Tier Tribunal
Considerations for landlords
If you’re a landlord, there are a number of things you should consider as a result of these regulations, including:
- When did the tenancy start?
- Is there an EPC (even if you did not obtain it)?
- Are any energy efficiency works required?
- If energy efficiency works are required, how will they be funded?
- Are any exemptions applicable?
- Have the relevant entries been made on the PRS exemptions register?
- How will you deal with any consent request made by a tenant?
If you need help on either of these issues or any domestic or commercial property disputes, please contact Sarah Barratt on 0191 211 7927