On 1 April 2018, MEES will come into force to ensure that all properties let after this date in England and Wales have an energy performance rating of at least an E on an energy performance certificate (EPC).
Any commercial or residential property below this rating is deemed substandard and a new or renewal lease cannot be granted unless the landlord has secured an exemption or MEES do not apply to the property in question.
From 1 April 2020, MEES will also apply to existing residential lettings and from 1 April 2023 for existing commercial lettings.
Exemptions are permitted when (amongst other conditions):
- Improvements would not be cost effective to the landlord;
- The necessary consent to undertake the required works is refused by a third party; or
- A qualified expert has confirmed that making the relevant energy improvement would result in a devaluation of the property by 5% or more or that the works would damage the property.
A breach of the new standards could be costly, with penalties reaching up to £150,000 for a commercial property and up to £4,000 for residential properties. Both are potentially substantial amounts which could financially cripple some landlords.
Maria Mowberry and B P Collins’ commercial property and residential property teams can help landlords to review their property portfolios to ensure they’re compliant with MEES and help to plan for the future. Please call Maria on 01753 889995 or email firstname.lastname@example.org.