From 1st April 2016, new legislation that affects landlords in England and Wales comes in to place – so, what are these regulations? And, are you prepared?
What are these new regulations?
Known as MEES (minimum energy efficiency standards), the new legislation forms part of the Government’s broad strategy to improve the energy efficiency of buildings. It affects both commercial and domestic landlords but this article relates to changes for domestic landlords only.
For domestic landlords, the following timeline applies:
April 2016. Tenant’s energy efficiency improvement regulations come in to force. These empower private domestic tenants to request consent for energy efficiency measures in the property. These requests cannot be unreasonably refused by their landlord where Green Deal Finance or other subsidies are available to cover the costs.
April 2018. Domestic landlords will need to make sure their properties have a minimum of an ‘E’ EPC rating before letting to new or existing tenants. If landlords don’t comply, it will be illegal to let their property.
April 2020. The legislation will apply to all private rented properties across England and Wales.
Are there any exemptions and exclusions?
While certain exemptions and exclusions will apply, landlords who are not exempt from the MEES regulations will typically face stiff penalties - cumulative fines of up to £5,000 for non-compliance. Further fines on top will also not be uncommon - making it difficult and costly for landlords to ignore these new rules.
If a tenant fails to consent or co-operate with you, there is an exemption from the obligation to meet the minimum energy standard.
How will the new rules make a difference?
This new legislation is part of a Government drive to improve energy efficiency and an 80% reduction in carbon emissions by 2050.
On an individual level, the private rented sector has the highest percentage of homes with the lowest energy rating; 9% of privately rented properties have an EPC rating below ‘E’.
Having a more energy efficient home will not help keep the property better maintained (as there will be less dampness, condensation and other associated damage) but will help keep tenants happier – as well as help the environment.
It may also help landlords meet their obligations under their landlord insurance cover to keep their property well maintained and in a good condition.
What should you do now?
It is never too early to start getting prepared. Here are 7 things to do right now.
- Check with your local authority to see if there are any grants or loans you can take advantage of in order to improve the energy efficiency of your property;
- Check the EPC rating or your property / portfolio of properties. Note that EPC ratings themselves may change, meaning a property that is currently rated an ‘E’ could fall below that standard. For those with a rating below ‘E’ you will need to put in place a plan for complying with MEES;
- Check existing leases to confirm rights of access for you to carry out any planned improvement works;
- Check whether the cost of such works can be recovered in whole or part from the existing tenants under the terms of their lease;
- Talk with existing tenants to agree a plan for complying with MEES;
- Use any tenancy voids to carry out improvement works:
- If you are granting a new lease that will continue beyond 1st April 2023, include rights for you to carry out any future works needed to comply with MEES and, ideally, to recover the costs from the tenant.
Hopefully this brief article on MEES has provided you with some ideas on what these new regulations are; how you will be affected; and what you may need to do to comply.