Legislation update: Minimum Energy Efficiency Standards

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Next year sees the introduction of stage one of the new Minimum Energy Efficiency Standards (MEES) in England and Wales.

These new measures are part of the government’s drive to combat energy inefficiencies in rented properties. They estimate:

  • 18% of privately let commercial buildings are below the MEES
  • 1 million residential tenants pay up to £1,000 extra per year due to energy inefficiencies.

The new standards

From April 2016 properties will be assessed and graded as to how energy efficient the building is. An ‘A’ rating will be deemed most efficient and ‘G’ the least with an ‘E’ rating the minimum level of acceptability. From April 2018 landlords will be unable to grant leases on properties rated ‘F’ or lower. They will also have an obligation to increase their rating or face substantial fines.

What do you need to do?

  1. Review your property(ies), do any have an EPC of ‘E’ or lower? If they do, you need to design a plan to raise their efficiency and overall rating.
  2. Identify whether you need your tenants consent before you can implement any improvements. You may wish to review your future leases to include a clause to allow you to conduct improvements required by law.
  3. Identify who is responsible for the cost of any necessary improvements, you as the landlord or your tenants? Again you may wish to review this in future leases.
  4. Consider whether you need to include any restrictions or exclusions in future leases to the use of your property(ies) to help maintain a specific EPC rating.

Although the new regulations are not introducing fines until 2018 it makes sense to be prepared and review any exposures in advance to lessen any potential impact to your property portfolio.

Source Zywave 2015 Newsbrief.

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Passionate about all things marketing. Louise is a chartered marketer who believes in a customer-focused approach to business.