energy efficiency rules landlords
12th November 2019 by Property Deal Store Administrator in Investors, Legislation

Energy Efficiency Standards Tightening for Private Rented Sector

On 1st April 2018 MEES (The Minimum Energy Efficiency Standards) came into force. The aim being to ensure privately rented properties have an energy performance certificate (EPC) rating of band E or better.

As with most regulations, MEES has been implemented in phases, with two important dates left for you to consider:

  • 1st April 2019
  • 1st April 2020

From April 2020, properties in bands F and G (the lowest bands) will need improvement for you to continue to let them out in most cases.

Do your properties come into scope?

Any properties that are let on a specific agreement, such as an assured tenancy and that require an EPC will need to comply with the regulations.

Most properties marketed (for sale or let) in the last ten years will legally have needed an EPC.

Therefore, it’s likely that all your properties will need to comply with MEES.

What you need to know from April 2019

From 1st April 2018 landlords only needed to make energy efficiency improvements if grant money was available.

That all changed in April 2019.

From 1st April 2019 all properties let to new tenants (and prior to the renewal of existing tenancies) need to have an EPC rating of band E or better, unless you’ve been granted an exemption.

If a property has a band F or G rating you are liable to pay up to £3,500 to bring the property up to a band E rating or better.

If you spend £3,500 and the property still doesn’t reach that standard, you can apply for a high cost exemption. You won’t have to spend more than this amount. There are other exemptions available too which we will look at below.

What you need to know from April 2020

All properties let out, including those tenanted prior to April 2018, will need to have an EPC rating of E or better.

Existing exemptions in place for landlords unable to fund energy efficiency improvements will end, meaning you will need to secure third-party funding or pay for any improvements needed yourself.

There will, however, still be certain exemptions that you can apply for. These include:

  • All ‘relevant energy efficiency improvements made’ – you have made as many recommended improvements as possible (up to £3,500) but the property still remains sub-standard
  • Where the recommended measure is not a ‘relevant energy efficiency improvement’ because purchasing and installing would cost more than the £3,500 cap
  • Temporary exemption due to recently becoming a landlord (usually 6 months)

What you need to do now

It’s time to review your EPC’s. Identify which properties don’t have an EPC rating of E or better, as they will need improvement prior to April 2020. Regardless of how long they have been let.

You don’t need consent from tenants to make the improvements so there’s no way around the regulations that way.

Start applying now if you think you qualify for an exemption. Most exemptions last for five years so there’s no need to wait. Financial penalties are in place, don’t delay and put yourself at risk.

If you have any existing exemptions in place, you should use the time between now and April to make sure that these will remain valid.

You can find out more about the regulations, including what’s classed as a recommend measure and how much each is likely to cost, here.

If you think your portfolio is particularly complex, or you just want to find out as much as possible, including more about exemptions (chapter 4), you can read the full 115-page Domestic Private Rented Sector Minimum Standard or download a copy for your legal team to review.

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-Janice Minihan, director and co-founder of Property Deal Store