The Minimum Energy Efficiency Standard (MEES) comes into effect on 1 April 2018, for new domestic and non-domestic lettings. After that date, landlords will not be permitted to rent out a property with an Energy Performance Certificate (EPC) rating of F or G, unless they have made all possible cost-effective energy-efficiency improvements. ‘Cost-effective’ broadly means an improvement that offers payback within seven years.
From 1 April 2023, all non-domestic, let properties must have an EPC rating of E or above – for domestic rented property, this deadline is April 2020.
The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, which implement provisions in the Energy Act 2011, have been described by lawyers as ‘complex and difficult to understand’.1
The original regulations were made on 26 March 2015,2 but an amendment in June 20163 postponed the dates on which the Exemptions Register for the regulations opens to domestic and non-domestic landlords. The register now comes into operation on 1 April 2017 for non-domestic premises, and on 1 October 2017 for domestic properties.
The regulations run to 30 pages and cover both the rights of tenants in domestic properties to request energy-efficiency improvements, and the rules on letting F- and G-rated buildings. There are also provisions for enforcement, penalties, appeals and exemptions.
The recently published guidance is the first plain-language description of the steps landlords will have to take to meet the MEES requirements. It only addresses non-domestic properties, but guidance on domestic lettings is promised.
The exemption will last for five years, but does not pass to a new owner or landlord
It is important to realise this is only guidance; it cannot clarify the regulations where they are vague and, ultimately, the courts will decide their meaning. So although the guidance addresses the exemptions issue, it can only offer advice on how to read the regulations.
While welcome – and helpful in many instances – there are some areas where it cannot provide clarity and where problems are likely to emerge.
The most obvious relates to exemptions, and the first concern is the definition of ‘relevant energy-efficiency improvements’ (Reg 24). This allows relevant improvements to be identified by a Green Deal report, an EPC report – prepared by a registered energy assessor – or ‘a report prepared by a surveyor’.
So a landlord with an F- or G-rated building may not be obliged to take the recommendations in the original report prepared with the EPC by an accredited energy assessor, but may be able to engage ‘a surveyor’ to draw up a new list of recommendations. This is perverse, but the wording is just not clear.
Where a landlord considers that some, or any, of these improvements are not cost-effective, they either need a written report from a ‘relevant person’ to confirm this, or three quotes from ‘relevant installers’ to show that the measures will not pay back in less than seven years. But the guidance and regulations are unclear here too.
This has the makings of a major loophole. The exemption will have to be registered, but that will not be difficult. It will last for five years, but does not pass to a new owner or landlord.
A further question relates to listed buildings and those within conservation areas. The guidance not only offers advice on the application of the MEES regulations, but also expresses a view on the interpretation of Regulation 5(1)a of the Energy Performance of Buildings Regulations (EPB). Between the EPB and MEES regulations, this is quite opaque, and the guidance is unable to offer transparency.
Other areas of the regulations and guidance will doubtless raise questions, but MEES is clearly here to stay – and from 1 April 2018 it will be in force.
CIBSE members can expect to receive an increasing number of enquiries about this, and may want to make themselves aware of the regulations and guidance so they are able to respond to them.
References:
- For more on this, see, for example, an article by Peter Williams of Shoosmiths.
- Original regulations.
- Amended regulations (which only change the dates as described in the article).
Hywel Davies is is technical director at CIBSE