From April 2018, the MEES (formerly known as the Minimum Energy Performance Standards or ’MEPS’) regulations will make it unlawful for landlords to let buildings in England and Wales (both commercial and domestic) which do not achieve a minimum Energy Performance Certificate (EPC) rating of ’E’.
Any property which is let with an EPC rating of ’F’ or ’G’ will be sub-standard for the purpose of MEES, and failure to comply with the regulations could mean landlords face fines of up to £150,000. MEES regulations are not limited to old or obsolete buildings, so it is likely they will have significant impact.
Landlords should therefore plan and prepare now to mitigate the impact the regulations will have on them.
When Will MEES Come Into Force?
From 1 April 2018 - MEES will apply to the grant of all new leases and lease renewals where an EPC exists.
From 1 April 2023 - MEES will apply to all leases including existing leases (unless the Landlord registers an exemption).
Since shorter leases are becoming more common in the marketplace it is highly likely that the majority of leases will be affected by MEES by the early 2020’s.
MEES will NOT affect the following properties:
- Properties that are not currently required to have an EPC.
- Leases granted for less than six months (where there is no right to renewal).
- Leases granted for 99 years or more.
Practicalities - What Should Landlords Do Now?
The obligation to meet the requirements of MEES will fall on the landlord; therefore any prudent landlord should undertake the following:
- Assess your property portfolio to establish which properties will come under the MEES regulations and which would qualify for exemption.
- Carry out energy assessments to ensure the energy efficiency ratings are correct.
- Assess the cost and timescale of any energy efficiency works which will need to be carried out.
- Understand how the lease length, break dates, rent reviews and renewal dates will fit in with the timescales for MEES regulations.
If you would like to discuss the best approach for you and your property portfolio and how to prepare for the forthcoming changes please contact a member of our Commercial Property Team.