Update to the MEES Regulations goes live
An amendment to the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (known as the MEES Regulations) comes into force on Monday 1 April 2019 which may require action from landlords where a property has an EPC rating below E.
This is an update on the MEES Regulations (for more information, you can read our 2015 article below).
The Government has consulted on the removal of the principle of “no cost to landlord” in relation to energy efficient works for domestic private rented premises in England and Wales.
That principle provides that if a domestic private rented property has an EPC rating of below E and funding is not available to fully cover the cost of making a recommended improvement, then the landlord does not have to make that improvement. Where a domestic property cannot be improved to an EPC rating of E or above because recommended measures cannot be installed without cost, the landlord is required to register a “no cost to landlord” exemption on the national private rented sector (PRS) Exemptions Register.
What is changing?
The amendment to the MEES Regulations, which comes into effect on 1 April 2019, replaces the “no cost to landlord” principle with a capped landlord cost contribution of £3,500 (including VAT). The cap can include expenditure dating back to October 2017, as well as third party funding which is available.
Additionally, a new “high cost” exemption (to be registered on the PRS Exemptions Register in the normal way) is available where the domestic private rented property in question cannot be improved to E or above for £3,500 including VAT or less. Three quotes from installers are needed to register this exemption.
The existing “no cost to the landlord” exemptions registered on the PRS Exemptions Register will expire on 1 April 2020 (they currently expire after 5 years); this will force affected landlords into spending up to £3,500 including VAT, or registering the new “high cost” exemption.
There is a further change to the rules applicable to the domestic private rented sector, in that the “consent” exemption which is available to landlords where tenants withhold consent to a Green Deal finance plan, is to be removed, as the Green Deal is no longer available.
In relation to both domestic and non-domestic private rented property, where a landlord has registered an exemption in circumstances where the tenant does not consent to an improvement, the landlord will no longer be able to rely on that exemption “once that tenant’s tenancy has come to an end”. It is, unfortunately, unclear exactly what those words mean in relation to renewals or assignments.