Back in December 2019, the Queen's speech re-affirmed the UK's commitment to achieve a net zero carbon target by 2050. The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, introduced MEES in 2016 as one way of targeting the UK's carbon emissions in the built environment.
Who does MEES impact?
From 1 April 2018, landlords of residential or commercial private rented property have had to ensure their properties have a minimum Energy Performance Certificate (EPC) rating of an 'E'. The requirements initially applied to new tenancies and renewed tenancies. However, from 1 April 2020, it will be unlawful to continue letting any residential property, including even those with an agreement already in place, if it does not adhere to MEES. Likewise, from 1 April 2023, it will be unlawful if a current commercial property lease does not comply with MEES.
So what's new?
The government is now consulting on increasing the MEES requirement to a minimum EPC rating for all commercial properties to 'B' or 'C' by 1 April 2030.
What does this mean for landlords, investors and developers?
- An enforcement authority may impose a financial penalty for a breach of MEES and could take a landlord to court if they fail to pay.
- There will inevitably be a financial cost incurred in upgrading property in accordance with a new EPC rating (as well as a potential loss of income if properties cannot be lawfully let).
- For landlords, it's obviously important to ascertain how many of their current properties fall below the requisite standard. It may also be prudent to review any current leases to ascertain who is responsible for ensuring that a property is compliant (particularly where a property is sublet).
- From an investment perspective, a portfolio that contains properties that do not meet the minimum EPC standard, may see a reduction in value.
- Development timetables could also be affected by any requirement to consider the impact of the new updated MEES regulations on a particular project.
For more information or guidance please do contact one of Freeths' Real Estate team.
Sabrina Ahmed
Legal Assistant, 0345 404 1750, [email protected]
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.