Elmhurst urges government to broaden energy efficiency efforts to include the non-domestic sector

Key provisions of the current non-domestic MEES regulations

It is important for landlords and property owners to stay informed about MEES regulations and take proactive steps to ensure compliance and avoid penalties.

Timeline:

From 1^st April 2018, all new leases and lease renewals for non-domestic properties must have an EPC rating of an E or above. This requirement also applies to lease extensions and sub-leases.

From 1^st April 2023, the regulations expanded to cover all existing leases. This means that all non-domestic properties that are currently being rented out must have an EPC rating of E or above. Landlords who have not already upgraded their properties to meet these standards may face penalties if they continue to lease substandard properties.

Exemptions:

There are a number of exemptions in place where landlords may not be required to meet the minimum EPC rating. These include (but are not limited to):

• Property Devaluation: Applies if an independent surveyor determines that making the required improvements would reduce the property’s value by more than 5%.
• All Improvements Made: Applies if all the relevant energy efficiency improvements for the property have been made (or if none can be made) and the property remains sub-standard.
• New Landlord Exemption: Applies where the landlord has recently acquired the property and needs time to comply. This applies under certain circumstances and you may only be exempt for a short period.

Landlords must register all exemptions on the Private Rented Sector (PRS) Exemptions Register to avoid penalties. You can access this on the government website, available on the following link: https://prsregister.beis.gov.uk

To apply for an exemption, landlords need to complete the online form and provide all required details, including the property address, EPC rating, and the type of exemption required. Landlords will also need to upload the evidence gathered to support the exemption claim.

More information on MEES guidelines can be found on the government website, available on the following link: https://www.gov.uk/guidance/non-domestic-private-rented-property-minimum-energy-efficiency-standard-landlord-guidance

Enforcement and Penalties:

Local authorities are responsible for enforcing the MEES regulations. Penalties for non-compliance can be severe, including fines up to £150,000, depending on the length of the breach and the property’s rateable value.

Future Developments:

The UK government has signalled its intent to tighten MEES regulations further in the coming years, as part of the UK’s commitment to reducing carbon emissions to net-zero by 2050.

In 2021, the government launched a consultation, titled Non-domestic Private Rented Sector minimum energy efficiency standards: EPC B implementation. This consultation proposed to raise the minimum EPC rating for non-domestic properties from an E to a B. The consultation closed for public comment in June 2022 and we are now awaiting a response from the government.

You can view the consultation by clicking the following link: https://www.gov.uk/government/consultations/non-domestic-private-rented-sector-minimum-energy-efficiency-standards-epc-b-implementation