Are you concerned about the changes to energy efficiency regulations affecting domestic rental properties?
What are the MEES and regulations?
The Energy Efficiency (Private Rented Sector) (England and Wales) Regulations 2015 will make it unlawful from April 2018 to let domestic properties with an Energy Performance Certificate (EPC) rating of ‘F’ or ‘G’ (i.e. the lowest 2 grades of energy efficiency).
The regulations were put into place to improve energy efficiency of privately rented homes and to meet UK targets of CO2 reduction under the Energy Act 2011.
Who does it affect and when?
From the 1st April 2018, the regulations will apply to landlords / property owners upon granting a lease to a new tenant, or lease renewals to an existing tenant. To comply, all properties must meet MEES by undertaking permissible, appropriate and cost-effective improvements, unless exempt. Properties which are let on tenancies of more than 99 years or less than 6 months, and some regulated tenancies such as housing associations will be excluded. The regulations will apply to all privately rented properties within the scope of the regulations from the 1st April 2020.
Are there any exemptions?
Landlords may be exempt when:
- The property is excluded from having an EPC
- Improvements are not cost-effective, either within a 7-year payback or under the Green Deal
- A suitably qualified expert provides written advice that the improvements would result in a devaluation of the property by 5% or more, or that the works would damage the property
- Third party consent cannot be obtained, for example from planning authorities
- Landlords can lodge exemptions on the PRS Exemptions Register from 2016.
What if you don’t comply?
Fines of up to £5,000 can be enforced, depending on the type of infringement and the length of non-compliance. A tenant can raise a case with the First-Tier Tribunal General Regulatory Chamber if they feel a landlord is non-compliant.
Next steps If you are an active DEA member and have clients who have interests in the privately rented sector, inform them about the regulations and changes to energy efficiency standards. Things to remember:
- They will need an EPC before the next time they let out a property
- EPC rating may have decreased since improved building regulations
- They must be able to achieve an E rating, OR can achieve an E rating by 2018, if the rental terms are changing, or likely to change.