The Government is consulting on Minimum Energy Efficiency Standards (MEES) which must be met before a property in the private sector can be let.
There are separate consultations relating to domestic and non-domestic properties and each closed on 2 September 2014.
The standards are provided for under the Energy Act 2011 and form part of the UK's long-term strategy for reducing carbon emissions from buildings.
The Government is proposing:
- the minimum standard required before a property can be let will be an EPC rating of E
- MEES will only apply where there is an EPC for the property
- if a building is exempt from the requirement for an EPC it will be exempt from MEES - such as a building due to be demolished
- MEES will apply to new leases to new tenants (including sub-lettings) from 1 April 2018 and to all leases (including lease renewals) from 1 April 2023
- that there will be exemptions:
- if the landlord has undertaken all energy efficiency improvements which meet the 'golden rule' under the Green Deal but the property still does not achieve an E rating. This means that repayments for improvements, including any interest charges, must be the same or less than the expected energy bill savings and therefore the improvements pay for themselves over a period of time without upfront cost to the landlord
- if third party consent is required to carry out improvements and cannot be obtained
- for short leases of under six months and long leases of over 99 years
- exemptions will last for a five year period, or shorter where a tenant refused consent to improvements but moves out before expiry of the five year period
- Trading Standards will enforce the MEES
The Government is also consulting as to whether:
- the minimum standard should tighten going forwards, e.g. to an EPC rating of D
- there should be exemptions for other building or lease types
- there should be an exemption where there would be a material net decrease in value as a result of the improvement works being carried out
- there should be an ability to finance and carry out improvement works outside the Green Deal
- whether there should be exemption certificates, which are either compulsory or which can be requested voluntarily
- what the penalties should be for non-compliance with the MEES (e.g. a civil penalty fixed at a percentage of the rateable value of the property)
The Government's response to the replies to the consultation and the regulations are expected to be issued in early 2015.
Link to the consultation for non-domestic properties
Link to the consultation for domestic properties