MEES: A landlord's guide to minimum energy efficiency standards
Minimum Energy Efficiency Standards (MEES) are regulations that landlords must comply with in order to let their property legally and reduce their property’s carbon footprint. In 2018, new regulations were introduced in England and Wales that raised the minimum energy efficiency rating (as recorded on an EPC) for rental properties to E and above. Landlords of properties with an EPC grade of lower than E must make urgent improvements to their property before it can be advertised for let.
Take a look at our Landlord’s Guide to MEES down below to learn more about energy efficiency requirements.
What does MEES mean?
Minimum Energy Efficiency Standards (MEES) are government regulated standards aimed to improve the overall energy efficiency of privately let buildings. Since their implementation in 1st April 2018, The Energy Efficiency (Private Rented Sector) (England and Wales) Regulations 2015 no longer allows residential properties with the two lowest grades of energy efficiency (F or G) to be rented. Under Minimum Energy Efficiency Standards, the rating must be at grade E or higher for a property to be let in accordance with the law.
A property’s energy efficiency rating is recorded on Energy Performance Certificate, ranging from A and B (most efficient) to G (least efficient). As of 1st April 2018, the legislation applied to all new and renewed existing leases; as of 1st April 2020, the energy efficiency standards were applied to all private domestic properties, regardless of commencement date. For commercial landlords, the standards will be applied universally to all commercial properties starting 1st April 2023.
The implementation of MEES is part of the United Kingdom’s wider policy initiative of substantially reducing home emissions by 2050.
How does it affect landlords?
Landlords must comply with MEES in order to let their properties. MEES make it illegal for commercial and domestic properties with a F or G energy rating to be used for tenancies unless exemptions apply. Inability to let properties may affect landlord property valuations, due to their reduced marketability.
The spending cap for necessary energy efficiency improvements, in total, is £3,500 including VAT. If complying with the MEES would require a landlord to spend more than £3,500 on improvements, necessary measures should be installed until the cost cap is reached. Afterwards, the landlord needs to apply for an exemption for any remaining cost.
Non-compliant landlords will receive a compliance notice from their local authority. In the case of a confirmed breach, landlords will be subjected to financial penalties. Penalties can also be imposed upon those who provided false information on the PRS Exemption Register. The maximum penalty per property in total is £5,000.
What is an EPC?
An Energy Performance Certificate (EPC) is a document that provides landlords with a property’s energy efficiency, alongside an average annual utility bill breakdown and recommendations for remedial measures that will improve its EPC grade. EPCs are required for any property that has been built, sold, and/or rented. Landlords must provide tenants with a copy of a property’s valid EPC before their official move-in date.
Landlords must get their property assessed by an accredited assessor in order to attain an EPC. To learn more about Energy Performance Certificates, take a look at our EPC blog post here.
What are the MEES exemptions and do they apply to me?
The various MEES exemptions for landlords are as follows:
- ‘All relevant improvements made’ – Landlords can register for this exemption if their property remains below the required EPC E rating after the cost cap (£3,500 including VAT) for improvements has been reached. The exemption lasts for five years, after which improvement attempts must be made again to reach proper energy standards.
- ‘High cost’ – To qualify for this exemption, landlords must show that even the cheapest cost of installing the appropriate measures exceeds the cost cap of £3,500 including VAT. Landlords must provide three of the cheapest quotes from qualified installers, as proof. The exemption lasts for five years, after which improvement attempts must be made again to reach proper energy standards.
- ‘Wall insulation’ – Landlords can register for this exemption if the only relevant property improvements needed are cavity, external, and/or internal wall insulation and a written expert opinion has shown that these improvements would damage the structure of the property. The exemption lasts for five years, after which improvement attempts must be made again to reach proper energy standards.
- ‘Third-party consent’ – This exemption is granted when the relevant improvements to property can only be carried out with the consent of a third party (by tenants, mortgagee, freeholder etc.) and the landlord was unable to obtain the consent. The exemption lasts for five years, or until consent is received if this is before the expiration of the exemption, after which improvement attempts must be made again to reach proper energy standards.
- ‘Property devaluation’ – A property devaluation exemption is granted when a landlord can prove that a property’s relevant energy efficiency improvements would devalue it by more than 5%. The exemption lasts for five years, after which improvement attempts must be made again to reach proper energy standards.
- ‘New landlords’ – Temporary exemptions are granted to new landlords, per the circumstances granted in Section 4.1.6 of the Department for Business, Energy, & Industrial Strategy’s The Domestic Private Rented Property Minimum Standard. The exemption lasts for six months.
How do I comply with MEES and make my property more energy efficient?
Landlords can learn more about their specific property improvements through their EPC’s recommendation report, a Green Deal Advice Report (GDAR), or through an independent report created by a surveyor. For example, the EPC report will breakdown recommended measures, alongside their respective costs, energy rating post-improvement, and average annual savings. Recommended measures could include room-in-roof insulation, low energy lightening, draught proofing, solar water heating, and increasing hot water cylinder insulation.
To help finance improvements, landlords can apply for partial or full third-party funding. For full third party funding, the cost cap does not apply. For partial funding below £3,500 the landlord will need to utilize personal funds to reach the cost cap limit.