Rural News Spring 2018 Edition

MINIMUMENERGY EFFICIENCYSTANDARDS

Phillipa Dalby, Land Agent

It is now illegal to let domestic and commercial property in England& Wales to new tenantswhere the property has an Energy Performance Certificate (EPC) rating belowband E. Theminimumenergy efficiency standards (MEES) under The Energy Efficiency (Private Rented Property) (England&Wales) Regulations 2015 came into force on 1st April 2018. The regulationswill alsomake it unlawful to continue letting privately rented property on an existing tenancy on or after 1st April 2020. It is therefore essential that landlords assess the compliance of their let property portfolio. Landlords should also be aware of the various exemptions available for sub-standard property. Landlords can let a propertywhere theMEES Regulations apply but which is below theminimumstandard if one of the exemptions apply. There are three key exemptions: 1) The Golden Rule - where all relevant energy efficiency improvements have been carried out. 2) Devaluation –where it is determined that the relevant energy efficiency improvements are likely to reduce themarket value of the property bymore than 5% 3) ThirdParty Consent –where consent froma third party such as the tenant or planning authority has been refused.

TheMEES Regulations are enforced by your local authority and they can issue notices and fines for any breaches of the regulations. For renting out a sub-standard property the landlord could receive up to a £2,000 penalty fine if the breach is less than threemonths. If the landlord has been in breach for threemonths ormore he or she could receive a penalty fine of up to £4,000. As a landlord, the greatest concern is the financial cost of upgrading non-compliant properties and the potential loss of rental income if a property cannot be let. However, there are funding opportunities available for landlords though the GreenDeal for domestic property. The GreenDeal is a source of funding for energy efficiencymeasures which links the repayments for the improvement works to the property’s energy bills. As a landlord the next step is to review the portfolio to identifywhich properties arewithin the scope of the regulations and to determine whether exemptionsmight apply. It is also important to ensure that EPC ratings are correct and up to date. Reviewing lease terms and key tenancy dates can also ensure compliancewith theMEES regulations. If you have any concernswith regard to the new regulations or are not surewhether your property is affected by theMEES, please contact your local Brown&Co office andwewould be happy to discuss the best approach for you and your property portfolio.

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OUT AND ABOUT IN 2018

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