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All You Need To Know About MEES (Minimum Energy Efficiency Standards) and EPCs

An Energy Performance Certificate (EPC) measures the energy efficiency of a property on a scale of A-G. The most efficient properties will be in band A and the least efficient in Band G.

Commercial Property

From 1 April 2023 it will be an offence to continue to let a commercial property if it does not have an EPC rating of at least E. Failure to comply runs the risk of a fine of between £10,000 to £150,000 per breach based on rateable value. Breaches may also be made public. 

It is likely that the requirements will increase to a C rating or higher by 1 April 2027 and a B or higher by 2030.

Residential Property

Since 1 April 2020 rented out residential properties must have an EPC rating of at least E. This looks likely to increase to a C or higher by 2025 for new lettings.

Landlords of property which currently have E/D ratings may want to consider improving the energy efficiency of the property now before being forced to do so.

Compliance

It is down to the landlord to comply with the legal standards.

There are some exemptions (and the legislation surrounding exemptions is complex, fact specific and legal advice should be taken on whether the exemption applies).

If an exemption applies, the landlord must enter the relevant details on the Private Rented Sector Exemptions Register to avoid enforcement action.

In brief, the exemptions are that all the relevant energy efficiency improvements for the property have been made (or there are none that can be made) and the property remains sub-standard, or an exemption set out in the MEES Regulations applies.  The main exemptions are:

·       Consent exemption; where consent for works from persons such as a tenant, a lender or planning authorities has been refused.

·       Devaluation exemption; where the landlord has obtained a report from an independent surveyor which states that making the relevant energy efficiency improvement would result in a reduction of more than 5% in the market value of the property, or of the building of which it forms part.

Landlords should review their portfolios, check compliance and plan for the tightening of the requirements in the future.

Posted on 04/04/2023 by Ortolan

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