George F. White are offering a service to help achieve regulatory compliance (Minimum Energy Efficiency Standards or MEES) in regards to your Commercial Energy Performance Certificate (EPC). You may be aware of these regulations but may not be aware of the implications or indeed the potential interventions you can make to ensure the ongoing viability of your property as a rental asset.
What are Minimum Energy Efficiency Standards (MEES)?
The Energy Efficiency (England and Wales) Regulations 2015, or MEES, is part of a drive to improve the energy efficiency of privately rented residential, commercial and industrial buildings across the UK.
Building Regulations will ensure that any new properties constructed meet current standards however, the MEES ensure that older, poorer performing buildings are improved. MEES apply to properties with an EPC rating below an F or G.
How are MEES being Introduced?
The regulations are being introduced in a staged approach to ease the transition for private landlords. It is important to consider that the EPC threshold is likely to rise in future.
From April 2018:
Domestic and non-domestic buildings that do not meet the minimum requirements cannot be lawfully re-let to new or existing tenants. Sufficient measures will improve the performance of the building to an EPC rating E or above.
From April 2023:
Landlords must not continue to let a non-domestic property holding an EPC rating of below an E.
Penalties for Non-Compliance…
Penalties for non-compliance in the form of financial penalties are based upon the rateable value (RV) of the property.
The enforcement authority may also publicise the breach through various media platforms.
|Less than 3 Months
||up to 10% of the RV of the property or £5,000 (whichever is the greater) up to a maximum of £50,000
|Beyond 3 Months
||up to 20% of the RV of the property or £10,000 (whichever is the greater) up to a maximum of £150,000
Exemptions and Exclusions
Buildings are exempt for a number of reasons including not being required to hold an EPC in addition too a lease term less than 6 months or a lease term in excess of 99 years.
Landlords are exempt from mandatory improvements if:
▪ An independent assessor shows that energy improvements will not payback within 7 years;
▪ The landlord is unable to gain third party consent either from tenants, superior landlords or where planning permission is required from the local planning authority;
▪ If the market value of the property will reduce by more than 5% as assessed by an independent assessor.
Exemptions can be registered with the PRS Exemptions Register and if agreed will only last for 5 years.
Please note that you have 6 months to improve your EPC rating to at least an E in addition to considering future improvements.
Contact our experts today for advice.
Andrew Rollo: 07545920905
Robert Hamilton: 07885 556849
An Energy Performance Certificate (EPC) graph looks quite similar to energy labels provided on many household appliances.
The purpose of the certificate is to indicate the energy efficiency of a building. The Housing Act 2004 is the UKs legislation relating to EPCs and introduced the EPC to England and Wales in August 2007. This was initially as part of the Home Information Packs (HIPs) which were later abolished.
An EPC is required for all properties that are marketed for sale or to let across the whole of the UK although there are some exemptions, for example:
- Listed buildings
- Temporary buildings with a planned use time of 2 years or less
- Residential buildings that are intended to be used for less than 1/3 of the year
- Standalone buildings with a floor area of less than 50m²
- If the owner can demonstrate that the building is suitable for demolition or redevelopment.*
The above list is not exhaustive.
A rating of between A-G is provided on a certificate with A being the most efficient, meaning fuel bills for the building are likely to be lower.
An energy survey will look at the how the building has been constructed (its fabrication) and its services (heating, ventilation and lighting) and from this survey an asset rating is calculated which reflects the age and condition of the building. It also states what the related carbon dioxide emissions for the property are.
The intention of an EPC is to provide prospective buyers and tenants of a building with a guide to how efficient it will be and practical advice to increase the energy performance of the property. It enables buyers to compare the ratings of properties across the UK.
The EPC includes recommendations to help owners and occupiers to improve the efficiency of the property. The majority of these suggestions are cost effective solutions however in some cases more depth is provided and suggestions go on to outline more expensive ideas. However, there is no statutory requirement for buyers or tenants to carry out these recommendations.
It is common for period properties to have a low rating but often the current and potential rating is more for information only for buyers on what can be done, if anything. Buyers do not put much importance on rating if they want a period property and if the rating is important to them they will often prefer new homes.
On the 1st April 2016 a new minimum standard for properties rented out in the private sector was introduced. From the 1st April 2018 there will be a requirement for new lets and renewal of properties rented out in the private sector to have a minimum energy efficiency rating of ‘E’ on an EPC. From 1st April 2020 the minimum standard of energy efficiency rating of ‘E’ on an EPC will apply to all existing tenancies therefore it will be unlawful to rent a property which breaches the requirement for a minimum ‘E’ rating, unless there is applicable exemption.
The Energy Performance Certificate is valid for 10 years providing no significant work has been carried out to the property. You can check whether there is an existing EPC for your property by visiting www.epcregister.com.
If you are thinking about selling or letting your property, George F. White are on hand to advise you with regard to Energy Performance Certificates. Please feel free to contact your local team with any questions you may have:
Gemma Miller – Alnwick, Northumberland – 01665 603581
Lindsay French – Wolsingham, County Durham – 01388 529579
Victoria Linsley – Barnard Castle, County Durham – 01833 690390
Sheryl Sowden – Bedale, North Yorkshire – 01677 425301
*Details available from an appropriately qualified agent.