The New MEES Regulations
As a Landlord of either a Commercial or Residential Property, from 1st April 2018, any properties rented in the private sector must have a minimum energy performance rating of E or above on their Energy Performance Certificate (EPC) under the Minimum Energy Efficiency Standards Regime (MEES).
The new regulations will apply to all new lets and renewals of tenancies with effect from 1st April 2018 and for all existing tenancies from 1st April 2020. It will then be unlawful to let a property with an EPC rating of below E.
Breaches of these regulations will result in a hefty penalty of up to £4,000 or 20% of the rateable value in commercial properties. The Local Authorities are also able to enforce compliance with the regulations.
Certain exemptions will apply and the regulations come into force on 1st October 2016 to allow Landlords to claim any exemptions early and have these in place before 1st April 2018. These exemptions include;
- The Landlord and/or Tenant will not consent to the works;
- Carrying out the works would cause a devaluation of the property of 5% or more;
- Works have been undertaken but the EPC rating is still below E.
Steps to consider
In order to mitigate the effects the new legislation will have on you and your assets;
- Obtain EPC’s. Ensure all of your tenanted properties (whether commercial or residential) have an Energy Performance Certificate that is less than 10 years old;
- Check the EPC rating. If it is rated E or above, you do not need to do anything further.
- Check the Lease. If the EPC rating is F or G and you decide to proceed with improvement works, the Lease terms need to be checked for your rights of entry to source costings and implement any works required. You will need to decide whether it is cost effective for you to carry out the works or whether selling the property would be more economically viable for you.
Anne Dobie, Head of Linder Myers Commercial Property team, can provide commercial and practical advice on the terms of your Lease and considerations for any future lettings of the property. We will also check whether any break clauses apply, whether the cost of the works can be recovered from the Tenant and when the term of the Lease will come to an end if you are considering selling.
Contact Anne today on 0161 835 8824, or email us on firstname.lastname@example.orgFind out more about our Commercial Property department