As a residential landlord you will be well aware of the minimum standard of energy efficiency (MEES) for all new leases which came into force on 1st April 2018. This provided that a privately rented residential property would have to achieve an energy performance rating of “E” or above. This was not a retrospective requirement.
A new date that all residential landlords should now be preparing for is 1st April 2020. From this date the updated MEES regulations will make it illegal to rent a privately rented residential property with an EPC rating of “F” or “G”.
If you are thinking of becoming a landlord, welcome to the world of MEES.
There are two scenarios in which a landlord could be caught out under the new updated MEES regulations: –
- If you are renting a property and the tenancy started before 1st April 2018 and will run until at least 1st April 2020.
As a landlord you will have until 1st April 2020 to improve the property or register an exemption if you wish to continue letting the property.
- If you are renting a property and the tenancy started before 1st April 2018 but you plan to enter into a new tenancy before 1st April 2020 you will now be caught under the new regulations.
You should begin preparing to improve the property to an “E” rating or above if you wish to grant a new tenancy or renew an existing tenancy before the 1st April 2020.
This will also cover periodic tenancies, or rolling tenancies, which arise once the fixed term has ended if the tenant is allowed to remain in occupation of the property on the same terms as originally entered into.
If you have not had to consider the MEES regulations before, or are a new landlord, you should be aware that since 1st April 2019 an improvement cap was put in place to a limit of £3,500.00 (inclusive of VAT). As a result your property will not become a “money pit”. While some improvements will be as simple as changing light bulbs some can be extremely costly. Therefore, if you are unable to raise the energy efficiency of your property to an “E” or above for less than £3,500 you will be required to install all measures up to the £3,500 cap and then register an exemption.
You should note, however, that whilst exemptions are available, there are limited circumstances in which an exemption to improvements will be granted and these only last 5 years and are only a short term fix. The exemption is also personal to the landlord and will not transfer on a sale, if you are a prospective landlord looking for your first rental property any existing exemption will fall away once you have purchased the property.
Finally, if you rent a property in breach of the regulations you will be liable to incur a penalty of up to £5,000 per property.
MEES can be a complex subject and if you should seek legal advice on any current tenancies you have in place and ensure you know your property and its energy rating before granting any new tenancies.
Greene & Greene is able to assist in the acquisition or disposal of leasehold and rental properties and for further advice please contact Sarah Ellis by e-mail – [email protected] or by phone on 01284 717522.