Residential: Government consultation to amend MEES Regulations for domestic property to introduce a 'landlord funding contribution'
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What are MEES?
Minimum Energy Efficiency Standards (MEES) came into force on 1 April 2016 under The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015. They apply to both commercial and residential buildings, which are required to have an EPC, although not to tenancies of less than 6 months or more than 99 years.
MEES Regulations will require landlords to carry out energy improvement works to properties with an EPC rating of less than “E” in order to let or continue to let these properties or face penalties.
Key dates
MEES have already partially come into force for residential premises, as since 1 April 2016, residential tenants under assured or rent act tenancies can request landlord consent (not to be unreasonably withheld) to carry out energy efficiency improvements.
Otherwise, MEES will come into force as follows:
- From 1 April 2018 - it will be unlawful to grant a new lease of residential or commercial premises with an EPC rating of less than E.
- From 1 April 2020 - MEES will apply to all residential lettings (both new and existing).
- From 1 April 2023 - MEES will apply to all existing commercial lettings so it will be unlawful to continue to let properties with an EPC rating below an E.
There are various exemptions available to landlords which must be registered on the PRS Exemptions Register. For example, residential landlords can register an exemption if they are unable to access funding to meet the full cost of improvements.
The Consultation
The expectation when MEES were drafted was that Green Deal finance would be available to fund a significant proportion of the improvements at no cost to landlords. However, Green Deal finance is now largely unavailable and other third party funding is insufficient to meet the shortfall. Landlords must therefore now meet the costs of making improvements themselves.
Accordingly, the Government is proposing to alter MEES for domestic property to:
- remove the ‘no cost to the landlord’ principle and curtail exemptions registered for this reason.
- introduce a cost cap of £2,500 on the amount any landlord would need to spend in making energy efficiency improvements to an inpidual property.
- amending exemptions to take account of improvements that exceed the cost cap.
The consultation closes on 13 March 2018 and the government plans to issue its response in spring 2018. A link to the consultation is here:
