March 15, 2017

RICS and E-First bring Minimum Energy Efficiency Standard Regulations (“MEES”) to the forefront

james-rics

James Cutter of E-first Chartered Surveyors Ltd has been working closely with the RICS and Sika in order to increase awareness before the 2018 MEES deadline. James has been carrying out seminars across the UK with the latest knowledge day at the RICS Westminster Head office.

For those who were unable to attend but would like a summary, the MEES (formerly known as Minimum Energy Performance Standards or ‘MEPS’) regulations apply to both residential and commercial property, but they affect commercial properties in the following ways:

  • MEES require a property to be brought up to a minimum EPC rating of ‘E’ and any rating below this is termed “substandard”.
  • From 1 April 2023, the legislation will be extended to existing leases, regardless of when the lease was granted but only in the event that the property had an EPC on the relevant date.
  • MEES apply to the grant of a lease on or after 1 April 2018, including lease renewals where an EPC exists. In certain circumstances, the landlord will have six months after the lease is completed to comply with the regulations in the event that the landlord had no choice whether to grant the lease.
  • Properties that do not need an EPC (either under the EPC regulations or building regulations) are not within the MEES regime. The MEES regulations also do not apply to short lettings or to lettings of 99 years or more.
  • Landlords will be exempt for a period of 5 years if they cannot obtain a necessary consent from a third party, or if compliance would devalue the property by 5% or more.
  • Landlords are exempt from reaching the minimum standard for 5 years if they have carried out all possible cost-effective improvements. Whether or not this standard has been reached may be established by using the Green Deal’s “Golden Rule” or under a new provision that requires improvements to pay for themselves within no more than 7 years. Guidance is due to be provided in this area by the Department of Energy & Climate Change (“DECC”).
  • Exemptions will need to be logged on a register with the DECC. A centralised register will log evidence of a landlord’s exemption from MEES. This will be a public register which will identify which buildings are substandard.
  • Exemption from MEES will not transfer to a buyer. From 2023 a successor landlord of a substandard property will either need to bring the property up to an ‘E’ rating within 6 months of acquisition, or establish a new exemption.
  • Enforcement will be dealt with by authorities and the penalties for breach could be up to £150,000.
  • The government will review MEES in 2020.
Click here for further information or advice on how to be ready for the up and coming changes to UK legislation.