UPDATE on Landlords guide to energy efficiency standards from 1st April 2019
4th April 2019 by Kerry Parsons
If you are a landlord who owns and wishes to let or rent a domestic property then before you do so, make sure you are aware of the Minimum Energy Efficiency Standards (MEES), which have been further amended since 1st April 2019.
The existing rules
Since 1st April 2018, the Minimum Energy Efficiency Standards (MEES) have applied, which have meant that Landlords of both domestic and non-domestic properties were not able to agree a new letting or tenancy for a property where the Energy Performance rating is below the E Grade.
Existing tenancies with an EPC rating of only an F or G, were given a grace period of two years to make improvements to the poor energy ratings. As of 1st April 2020, it was intended that the MEES would apply to all tenancies, old or new and therefore all tenancies would need to have an EPC rating of at least an E.
What are the changes to the MEES?
The government has made the Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2019. The amendments came into force on 1st April 2019.
The majority of the amendments relate to domestic privately rented property and can be summarised as follows:-
- The previous available exemption, “no cost to the landlord” in relation to sub-standard domestic properties has been removed and instead under the new rules, Landlords will be expected to contribute up to £3,500 (including VAT) per property to raise the energy rating over an E grade.
- For existing properties, where the “no costs to the landlord” exemption applies, they will remain on the exemptions register until 31st March 2020, after which they too will be removed and thereafter Landlords will have to contribute up to £3,500 for improvements.
- If the costs of making improvements to a sub-standard property exceeds £3,500 (inc VAT) and the Landlord can evidence this with three separate quotes, then the Landlord can apply for an exemption for any cost over the £3,500 cap.
- If a Landlord has made any energy improvements since 1st October 2017 (up to 31st March 2019) then those costs can be deducted from the £3,500 cap. The value of further improvements can then be determined.
- There is no longer the exemption which previously allowed a Landlord to escape the improvement costs, if the tenant of a domestic property did not provide consent to a Green Deal finance plan.
- If a Landlord has already registered for an exemption (i.e. where a tenant has not consented to improvements being made), then the Landlord will not be able to rely on that exemption once that particular tenant’s tenancy has ended. There is no clear guidance on how this might apply to renewals of tenancies or assignments.
If you require further assistance on the MEES changes then please contact Kerry on firstname.lastname@example.org or 01202 743286.