EPC & MEES: The Minimum Energy Efficiency Standards
5th March 2019
From April 2018, all newly rented homes will need a minimum energy efficiency grading of Band E or higher – or they will be illegal to rent out.
Unless there is an exception.
The regulations apply to new lets and renewals of tenancies, and will apply to all existing tenancies on 1st April 2020.
Exceptions include
– churches and other places of worship
– temporary buildings with a planned time use of two years of lease or less, and
– where funding is not available
However, the government has now changed the rules on funding to provide and from 1st of April 2019 landlords must now contribute up to £3,500 (inclusive of VAT) towards the cost.
So a property will ONLY be exempt if the cost exceeds the available funding AND the landlords £3,500 contribution.
EXCEPTIONS TO SELF-FUNDING CAP
1.Where improvement works have been carried out and the property still remains rated F or G.
2.Cost of purchasing and installing the recommended measure will exceed the cost cap.
3.Wall insulation cannot or should not be installed.
4.Third party consent exemption.
5.Property devaluation exemption.
6.Temporary exemption due to recently becoming a landlord.
It may be frustrating for some landlords with large portfolios, but now is the time to plan ahead, or risk a penalty for non-compliance.
PENALTIES…
The regulations will be enforced by Trading Standards Officers. Penalties will be based on the rateable value of the property, up to a maximum of £150,000, per occasion.
Landlord’s energy efficiency responsibilities:
Properties are rated on the efficiency of their energy usage, and generally an Energy Performance Certificate (EPC) is required whenever a property is put on the market for sale or to rent.
EPCs are rated from Band A,meaning the most efficient, to Band G, the least efficient, and from April 2018, landlords in England and Wales are obliged to raise their properties to the level of Band E or above.
Why should landlords comply with MEES guidelines?
One of the top reasons, that tenants leave a property is because it is too expensive.It doesn’t matter if their rent is fair and affordable; if the bills are too high, then tenants are more likely to leave at the end of their tenancy agreement, meaning more hassle for you and the risk of an empty property. Alternatively, a property will always be more attractive to informed tenants if the EPC rating is good, and will probably have fewer tenants going into rent arrears.
A property with increased energy efficiency may also see an increase in value, offer the scope for a higher rent, have a lower risk of condensation and damp, and have a reduced need for repairs as burst pipes during the coldest months.
Properion can help with house improvements and refurbishments, please have a look at our refurbishment services here.
It is important to note that this article isn’t exhaustive and doesn’t constitute legal advice.
