In 2018, the Government introduced new legislation to improve the energy-efficiency standards of properties in the UK’s private rented sector.
The Domestic Minimum Energy Efficiency Standard (MEES) now states that all private rented properties must achieve a minimum Energy Performance Certificate (EPC) grade of E, or higher. This means that landlords who are currently renting out a property with an EPC rating of F or lower may face a penalty charge of up £4000.
The legislation gives landlords until 1 April 2020 to either improve the standard of any property they are currently renting out to a rating of E or above – including existing tenancies – or to register for an exemption, if applicable.
For landlords who are unsure how they can improve their EPC rating, the looming deadline may seem daunting. Here, we explain the details on the MEES compliance deadline and provide some tips to help landlords check and improve their property’s EPC rating.
Hamilton Fraser’s guide, ‘New energy performance certificate: Keeping your property green’, provides further information about Energy Performance Certificates and how to find your EPC.
What are the enforcements and penalties?
The MEES Regulations are enforced by local authorities, who have been granted a range of powers to ensure compliance. If a local authority has reason to believe that a landlord has failed to fulfil their obligation to comply with the MEES legislation by 1 April 2020, they can serve the landlord with a compliance notice. If there is a confirmed breach of compliance, the landlord could receive a financial penalty.
A compliance notice may request information about:
- The EPC that was valid during the time the property was let
- The tenancy agreement used for letting the property
- Information about energy efficiency improvements made to the property
- Any ‘Energy Advice Report’ that was carried out on the property
- Other relevant documents
If a local authority confirms that a landlord’s property is in breach of the regulations, they can be served with a financial penalty up to 18 months after the breach. Local authorities have discretion in deciding the level of the penalty, up to the maximum allowed by the regulations.
The financial penalties for breaches of regulations are:
- Up to £2,000 for renting out a non-compliant property for less than 3 months
- Up to £4,000 for renting out a non-compliant property for 3 months or more
- Up to £1,000 for providing false or misleading information on the PRS Exemptions Register
- Up to £2,000 for failure to comply with a compliance notice
The maximum amount that a landlord can be fined is £5,000 per property. More information about enforcements and penalties can be found here.
What are the exemptions?
Landlords may be exempt from the MEES regulations under certain circumstances. These exemptions are based on circumstances where either the improvements costs are too high; it would be unreasonable to expect a landlord to prepare their property by the specified deadline; the landlord has made reasonable efforts to make all the necessary changes and the property still does not achieve the minimum rating; or if the modifications required for the improvements would be considered detrimental to the property.
Listed exemptions for the MEES regulations are:
- ‘High cost’ Exemption – where the cheapest recommended improvement would exceed a cost of £3,500
- ‘Seven year payback’ Exemption – where a recommended measure would fail to make savings on energy costs over a period of seven years
- ‘All Improvements Made’ Exemption – where all necessary improvements have been made and the property remains sub-standard
- ‘Wall Insulation’ Exemption – where wall insulation improvements are unsuitable for a property
- ‘Consent’ Exemption – where third party consent is required for improvements
- ‘Devaluation’ Exemption – where improvements would cause property devaluation
- ‘New Landlord’ Exemption – temporary exemption due to recently becoming a landlord
More information about the MEES regulation exemptions can be found here.
How can you check and improve your EPC rating?
You are unable to rent or sell your property without a valid EPC certificate, so if you do not have one you’ll need to book an assessment. An assessment can cost up to £120 depending on the type of building, but for most buildings, the price should be lower than this. When you’re ready to have the energy efficiency standard of your property assessed, you will need to find an accredited energy assessor in your area.
In order to prepare for your assessment, you should have the relevant improvements made to your property to make sure that you achieve an EPC rating of E or above. EPCs give advice on what you can do to improve the energy efficiency of you property, so if you already have an EPC that is a good place to start.
Here is a list of key improvements that can help to improve your EPC rating:
- Replacing glass in windows and doors with double or triple-glazing
- Insulating the loft, walls and floors with high-quality insulation
- Replacing your old boiler with a newer, more efficient model
- Upgrading all light bulbs to LED light bulbs
- Installing low-flush toilets and water-saving showers
- Replacing your older appliances with newer models that come with ‘eco’ or ‘energy saving’ modes
By taking steps to make these improvements, you will increase your chances of achieving the minimum EPC rating of E before the MEES regulation deadline on 1 April 2020. For more advice on complying with landlord-related legislative changes, visit Hamilton Fraser’s legislation guide.