From 1st April 2020 local authorities are required to enforce Minimum Energy Efficiency Standards (MEES) in the private rented sector (PRS).
All PRS properties must possess an Energy Performance Certificate (EPC) demonstrating an energy efficiency of band E or above (some exemptions).
Working out when you need to take action
|Your current tenancy period||Action|
|Started before 1 April 2018 and runs until at least 1 April 2020||You have until 1 April 2020 to improve the property rating to E, or register an exemption, if you want to continue to let it|
|Started before 1 April 2018, but you plan to enter a new tenancy (with a new or existing tenant) before 1 April 2020||You need to improve the property rating to E, or register an exemption, before you enter into a new tenancy or renew an existing tenancy|
|Started on or after 1 April 2018||If you haven't already taken action, you must improve the property's rating to E immediately, or register an exemption|
If your property is currently empty, and you are not planning to let it, you don’t need to take any action to improve its rating until you decide to let it again.
Funding improvements to your property
The cost cap: you will never be required to spend more than £3,500 (including VAT) on energy efficiency improvements. If you cannot improve your property to EPC E for £3,500 or less, you should make all the improvements which can be made up to that amount, then register an ‘all improvements made’ exemption.
Registering an exemption
There are various exemptions that apply to the prohibition on letting a property with an energy efficiency rating below E.
If your property meets the criteria for any of the exemptions, you will be able to let it once you have registered the exemption on the PRS Exemptions Register.
Information required for all exemptions
- address of the property
- type of exemption you are registering
- copy of a valid EPC for the property
‘All relevant improvements made’ exemption Register this exemption if the property is still below EPC E after improvements have been made up to the cost cap (£3,500 incl VAT), or there are none that can be made.
‘High cost’ exemption Register this exemption if no improvement can be made because the cost of installing even the cheapest recommended measure would exceed £3,500 (including VAT).
Wall insulation exemption Register this exemption if the only relevant improvements for your property are:
- cavity wall insulation
- external wall insulation
- or internal wall insulation (for external walls)
AND you have obtained written expert advice showing that these measures would negatively impact the fabric or structure of the property (or the building of which it is part).
Third-party consent exemption Register this exemption if the relevant improvements for your property need consent from another party, such as a tenant, superior landlord, mortgagee, freeholder or planning department, and despite your best efforts that consent cannot be obtained, or is given subject to conditions you could not reasonably comply with.
This exemption lasts:
- 5 years
- or, where lack of tenant consent was the issue, until the current tenancy ends or is assigned to a new tenant.
Property devaluation exemption Register this exemption if you have evidence showing that making energy efficiency improvements to your property would devalue it by more than 5%. In order to register this exemption you will need a report from an independent surveyor. This surveyor needs:
- to be on the Royal Institute of Chartered Surveyors (RICS) register of valuers
- to advise that the installation of the relevant improvement measures would reduce the market value of the property, or the building it forms part of, by more than 5%.
Temporary exemption due to recently becoming a landlord If you have recently become a landlord under certain circumstances you will not be expected to take immediate action to improve your property to EPC E. You may claim a 6 months exemption from the date you became a landlord.
Enforcement and penalties
The MEES Regulations are enforced by local authorities, who have a range of powers to check and ensure compliance.
The Regulations mean that, since 1 April 2018, private landlords may not let domestic properties on new tenancies to new or existing tenants if the Energy Efficiency Certificate (EPC) rating is F or G (unless an exemption applies).
From 1 April 2020 the prohibition on letting F and G properties will extend to all relevant properties, even where there has been no change in tenancy.
If a local authority believes a landlord has failed to fulfil their obligations under the MEES Regulations, they can serve the landlord with a compliance notice. If a breach is confirmed, the landlord may receive a financial penalty.
Non-compliance with the Regulations
Your local authority may check for different forms of non-compliance, including one or more of the following:
- from 1 April 2018, you let your property in breach of the Regulations
- from 1 April 2020, you continue to let your property in breach of the Regulations
- you have registered any false or misleading information on the PRS Exemptions Register
If a local authority believes a landlord may be in breach, they may serve a compliance notice requesting information to help them decide whether a breach has occurred. They may serve a compliance notice up to 12 months after a suspected breach occurred.
A compliance notice may request information on:
- the EPC that was valid for the time when the property was let
- the tenancy agreement used for letting the property
- information on energy efficiency improvements made
- any Energy Advice Report in relation to the property
- any other relevant document
If a local authority confirms that a property is (or has been) let in breach of the Regulations, they may serve a financial penalty up to 18 months after the breach and/or publish details of the breach for at least 12 months. Local authorities can decide on the level of the penalty, up to maximum limits set by the Regulations.
The maximum penalties amounts apply per property and per breach of the Regulations. They are:
- up to £2,000 and/or publication penalty for renting out a non-compliant property for less than 3 months
- up to £4,000 and/or publication penalty for renting out a non-compliant property for 3 months or more
- up to £1,000 and/or publication for providing false or misleading information on the PRS Exemptions Register
- up to £2,000 and/or publication for failure to comply with a compliance notice
The maximum amount you can be fined per property is £5,000 in total.
For more information on exemptions or to register an exemption https://www.gov.uk/government/publications/private-rented-sector-minimum-energy-efficiency-standard-exemptions/guidance-on-prs-exemptions-and-exemptions-register-evidence-requirements
Last Updated on Monday, June 22, 2020