Beginning with a consultation in February 2015, the UK Government set out its thoughts on establishing a Minimum Energy Efficiency Standard (MEES) for domestic and non-domestic buildings in the private rented sector in England and Wales.
Our non-domestic buildings are responsible for 12% of UK emissions, with c.60% of today’s buildings still expected to be operational by 2050. This means that 40-45% of total non-domestic floor space is currently already in use, much of which has poor levels of energy efficiency.
As such, the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 have been introduced to tackle the very least energy efficient buildings.
From the 1st April 2018, landlords of buildings within the scope of the regulations will be prevented from granting:
Furthermore, from the 1st April 2023, the regulations will apply to all privately rented non-domestic properties, including where a lease is already in place and a property is occupied by a tenant.
The regulations apply to all privately rented properties which are required to have an Energy Performance Certificate (EPC) in England and Wales, meaning that certain buildings, for example, places of worship, low energy usage buildings, etc., are exempt.
Properties are only considered to be ‘privately rented’ when they are leased on a term greater than six months, or less than 99 years.
In addition, in order to ensure that the regulations are effective and meaningful, only ‘relevant’ improvement works are required to be undertaken.
There are 3 main categories of exemptions from the regulations:
Finally, a new landlord is exempt from the regulations for six months from taking over ownership of a property.
All other exemptions are valid for a period of 5 years from notification.
An exception can be recorded where all ‘relevant’ improvements are implemented, but a building still fails to meet the Minimum Energy Efficiency Standards, allowing the landlord to continue to lease the property.
It is required for all exemptions and exceptions (including temporary exemptions) to be recorded on the PRS Exemption Register.
Failure to record these will mean that a landlord cannot lease the building, without being in breach of the regulations.
To be fully compliant with the MEES Regulations, all exemptions must be backed by appropriate and robust supporting evidence.
Compliance will be enforced by Local Weights and Measures Authorities. Landlords found to be in breach of the regulations may be subject to significant financial and reputational penalties.
Where a landlord lets a building which does not comply with MEES Regulations, they can be subject to financial penalties of up to £150,000, as well as public notification of their non-compliance.
Additional penalties apply for failing to appropriately record or evidence exemptions.
MEES will transform the rental sector for commercial landlords, tenants, property management companies, local authorities and anyone concerned with private rented properties. As the regulations impose restrictions on privately rented properties, it is essential to understand the relevant requirements and obligations.
Stroma Tech has an expert team, who can help to determine potential risks across large portfolios, and work with you to ensure properties meet the required standards of compliance.