Minimum Energy Efficiency Standards for Rented Property

Minimum Energy Efficiency Standards for Rented Property

Overview

The 2015 Energy Efficiency Regulations, passed in March 2015, set out minimum energy efficiency standards (MEES) for England and Wales.

These regulations make it unlawful for landlords to grant a new lease of properties that have an energy performance certificate (EPC) rating below E, from 1 April 2018. The regulations do not affect sales. 
 
The regulations will come into force for new lets and renewals of tenancies with effect from 1st April 2018 and for all existing tenancies on 1st April 2020. It will be unlawful to rent a property which breaches the requirement for a minimum E rating, unless there is an applicable exemption. A civil penalty of up to £4,000 will be imposed for breaches. 

What will the regulations mean for landlords and tenants? 

More control of energy bills and warmer homes

Up to 1 million domestic tenants in the private rented sector may be helped by the regulations, which is likely to grow over time as people move from property to property. The regulations are another way Government is helping consumers take control of energy bills and have warmer, more energy efficient homes.   

Tackling fuel poverty 

Improving the energy efficiency of domestic privately rented property is important in tackling fuel poverty.  Fuel poor households privately renting an F or G EPC rated home would need, on average, to spend around £1,000 more per year on energy to heat their homes properly compared to typical homes. This compares to around £390 for those in EPC bands E and above.  

More energy efficient properties

Investing in their properties will benefit landlords as they will own more energy efficient properties that should be warmer and more attractive to tenants.  

Landlords will be required by law to have improved the energy efficiency rating of the properties they let to at least a Band E from April 2018. However, there should be no upfront costs for them to do this, and the regulations provide safeguards to ensure this is the case.   

Funding improvements

There are a range of funding and financing options, such as Energy Company Obligation and the Green Deal that will help support residential landlords and tenants make improvements before the regulations apply.  Landlords and tenants can find out if they are already eligible for Government support schemes, such as the ECO, by contacting the Energy Saving Advice Service (ESAS) on 0300 123 1234 or visiting www.gov.uk/greendeal.    

What’s more, from April 2016, tenants will be able to request consent from their landlord to make the property they rent more comfortable, and easier and cheaper to keep warm, and the landlord cannot unreasonably refuse.

Prohibition on letting

A domestic private rented sector property is substandard if the EPC rating is F or G, unless an exemption applies. The legislation prohibits a landlord from letting out a substandard property. If there is an EPC in place which shows that the property is an F or G then it must not be let; otherwise the landlord is liable to penalties. This is subject to any available exemptions. 

Energy efficiency improvements must be carried out to bring the property up to an E rating at the minimum, unless one of the exemptions is applicable. In particular, if the work cannot be carried out so as to meet the Green Deal Golden Rule then there is potentially an exemption. Under the Golden Rule there should be no upfront costs (or any net cost to the landlord) because savings resulting from the works should repay their cost over the expected lifetime of the works.

If a landlord lets and continues to let the property in breach of the regulations, however, the breach does not affect the validity or legality of the tenancy itself, so the rent still continues to be payable.

YOUR AGENT comment.

As qualified Energy assessors (both domestic and commercial)  we will work together with all our landlord clients to ensure they are fully compliant with this change in legislation.