Landlords do not have long to make sure their properties comply with the new Minimum Energy Efficiency Standards (MEES) being brought in next year. If their properties are not compliant with the MEES, they could face hefty fines of as much as £5,000 for domestic properties. That is why all landlords are being urged to take steps to make sure all buy-to-let properties will comply with MEES when it is introduced next April 1. After that date, it will be illegal to let a property with a poor rating.
Older properties are being mooted as the ones most likely to have a poor rating, because of changes to building regulations which makes new-builds more energy efficient. This could mean a lot of work needs to be carried out to increase their rating, which is why it is advisable to start planning now. The new MEES will mean all buildings in England or Wales, both domestic and commercial, will need to have a rating of at least E on their Energy Performance Certificate. If not, they cannot be leased or rented out. Even properties with a current E rating could be at risk because the regulations have changed since the certificates were brought out.
Landlords are being advised to make an energy action plan of any improvements needed to improve the EPC rating and to ensure the rating means the property will comply with the new MEES regulations. This will be particularly necessary for properties where the EPC has not been updated since the certificate was issued.
The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 will mean that all properties rented in England and Wales have at least an E rating on their EPC before a tenancy is granted to new or existing tenants from April 2018. From 1 April 2020, the regulations will apply to all private rentals. These requirements will apply to rented non-domestic properties from April 2023. There are some exemptions from reaching the minimum standards, such as landlords having carried out all improvements which are cost-effective but the property remains below an E rating, tenants withholding consent for any works, or remedial works having a potentially negative impact on the property.
Obviously, the new MEES ruling should also be borne in mind for buy-to-let investors who are planning to purchase further properties within the next 12 months. It is worth checking the energy efficiency rating and costing any works if it is below E, before going ahead with the sale.