The MEES are a set of legal requirements that landlords must comply with to improve the energy efficiency of privately rented properties across the UK. They apply to certain private rented properties that are legally required to have an Energy Performance Certificate, both domestic and non-domestic, with leases of longer than 6 months and shorter than 99 years.
The MEES were originally drafted with a requirement that landlords would only have to comply when they could do so ‘wholly, at no upfront cost’. At the time the MEES came into force (2015) this was easily achievable by taking advantage of schemes such as the Government’s Green Deal Scheme, whereby the loan for the improvements would be attached to the property and the tenant would pay off the loan via their electricity bill. However, the Government’s decision to stop funding the Green Deal Scheme removed the main route that landlords used to fund improvements in order to comply with the MEES.
A new Green Deal funded by private finance looks like it is going to become available which will satisfy the ‘no upfront costs’ requirement when complying with the MEES. However, a formal announcement is yet to be made in relation to the availability of this nationwide.
On 1 October 2017 an exemptions register went live which allows landlords to begin to take steps to make sure their properties are compliant with the MEES, if not by carrying out improvement works then by applying for exemption.
Examples of the exemptions landlords can apply for include:
- If a tenant refuses to give consent for the energy efficiency works to take place the property qualifies for a 5-year exemption at the end of which the landlord must comply or renew the exemption.
- If the landlord has obtained a report prepared by an independent surveyor which states that making an energy efficiency improvement would result in a reduction of more than 5% in the market value of the property, or of the building it forms part.
- A landlord applies for planning permission to install certain energy efficiency works and consent is refused.
- A landlord has made all relevant improvements that can be made to a property and the property has still not achieved an E rating. This exemption is valid for 5 years.
If a landlord simply cannot access funding for improvement works (for example, if there are no installers operating in their area), the landlord may be entitled to an automatic five-year exemption from the MEES if it can be proven that no access to funding is available, or if other funding that is available does not cover 100% of the cost of the works, therefore leaving the landlord with an upfront cost. A successful application for 5-year exemption means that no improvements have to be made to the property for 5 years regardless of any tenancy changes. It must be noted, however, that a transfer of the property to a new landlord will make the exemption fall away.