If you have a let property with an EPC rating of ‘F’ or ‘G’ then you should prepare now for the extension of the regulations to existing tenancies.
Landlords should consider the following, in order to protect their assets:
- Review your property or property portfolios to identify whether or not properties are compliant
- Consider the cost and extent of any works required
- Consider access to the properties (lease terms permitting) to carry out works required to bring the properties up to the minimum ‘E’ rating; and
- Consider whether any exemptions may be relied upon
- If works are required to meet the new regulation – decide and budget for the work to be done and plan when and how this will be undertaken
There is speculation that MEES will rise again in 2022, making ‘C’ or ‘D’ the new minimum requirement. When considering any works to upgrade a property to comply with the MEES Regulations for April 2020, landlords should also bear in mind the potential future impact of the regulations.
*A new Landlord with a property not yet let must ensure the property has an EPC rating of E or above pre letting.
What is the requirement when renewing an existing tenancy or commencing a new tenancy?
- April 2018 Changes – After April 2018, if the minimum term ended but they still have a contract in place the rules don’t suddenly apply to the tenancy. Even if the last rating was below an E, they will be OK as long as they don’t renew the tenancy. After the minimum term expires, the tenancy can run on as a periodic tenancy without renewal.
- April 2020 Changes – In April 2020, the new MEES rules will apply to all existing lets. At this point, they will need an EPC rating of an E or above to let the property at all. Even if the tenancy is already underway and they have no plans to renew, after April 2020, you will need to have an EPC rating of E or above or they could face fines.
Minimum Energy Efficiency Standards (MEES)
There are various exemptions that apply to the prohibition on letting a property with an energy efficiency rating below E.
So, the minimum acceptable rating is an ‘E’ – ‘F’ and ‘G’ are BELOW acceptable.
If your property meets the criteria for any of the exemptions, you will be able to let it once you have registered the exemption on the PRS Exemptions Register.
Exemptions – There are 6 types of exemption that can be registered
- All relevant improvements made exemption – Register this exemption if the property is still below EPC E after improvements have been made up to the cost cap (£3,500 inc VAT), or there are none that can be made.
- High-cost exemption – Register this exemption if no improvement can be made because the cost of installing even the cheapest recommended measure would exceed £3,500 (including VAT).
- Wall insulation exemption – Register this exemption if the only relevant improvements for your property are:
- Cavity wall insulation
- External wall insulation or Internal wall insulation (for external walls)
- Third-party consent exemption – Register this exemption if the relevant improvements for your property need consent from another party, superior landlord, mortgagee, freeholder or planning department, and despite your best efforts that consent cannot be obtained or is given subject to conditions you could not reasonably comply with.
- Property devaluation exemption – Register this exemption if you have evidence showing that making energy efficiency improvements to your property would devalue it by more than 5%.
- Temporary exemption due to recently becoming a landlord
If you have recently become a landlord under certain circumstances, you will not be expected to take immediate action to improve your property to EPC rating E. You may claim a 6-month exemption from the date you became a landlord.
- Existing Landlords – all rental properties must have the EPC rating checked
- New Landlords – the proposed rental property must have the EPC checked to find out the rating of the property
- Any landlord who currently owns a property rated below E on an EPC needs to consider what works are required to improve the rating. The 6-month exemption can be applied for so that the work can be completed
- Any Landlord in need of an EPC we can arrange this for you at a cost of £60
If you need any support with any of the above we are here. We can help you meet these changes in the legislation, let’s get you booked in for an up-to-date EPC. We have reliable, professional contractors on hand for any upgrading works. If you would like any advice and support, please get in touch.