What are the Minimum Energy Efficiency Standards (MEES)?

The MEES is a new piece of legislation that takes effect from the 1^st April 2018.

The legislation affects landlords – the core of the legislation is that landlords will not be able to let residential properties that have an EPC rating of lower than E. However, the legislation has been designed to be cost neutral to a landlord, and exemptions (for the landlord) apply where this is not possible.

There are two key dates:

• 1^st April 2018 – no new tenancies can be started if the property is below an E rating.
• 1^st April 2020 – all tenancies are affected from this date – i.e., no lets can happen where a property is below an E rating.

What happens if you don’t comply with the legislation?

• Your property cannot legally be let
• A fine can be levied against landlords who continue to let a property with an EPC rating lower than E.

There are a number of exemptions within the legislation, which means that works will not need to be done on the property.  These include:

• If the improvement cannot be wholly financed by central government, a local authority or any other person – i.e. the improvement should be cost neutral for the landlord
• If 3^rd party consent cannot be obtained
• Where improvements would reduce a property value by greater than 5%
• If the property is only used for for short term leases, such as holiday lets.

Funding for Improvements

The Government is committed to ensuring the regulations do not entail net or upfront costs to landlords for the required improvements.  Therefore landlords would be permitted to let a property below the minimum ‘E’ standard where the property has undertaken all those improvements that would meet the Green Deal’s ‘Golden Rule’ – that the cost of the work, including finance costs, should not exceed the expected savings.  This calculation would take into account any funding available through:

a) Green Deal finance,

b) ECO funding,

c) Grant funding,

d) A combination of these funding mechanisms.

The landlord is free to contribute extra to the cost of the energy efficiency improvements in order to realise the benefits from installing measures.  However there is no compulsion to do so.