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.