Following the Energy Act 2011, the MEES Regulations were introduced in an attempt to improve the energy efficiency of residential and commercial privately rented property.
What do the MEES Regulations mean for landlords?
Since 2018, commercial landlords have only been able to grant a lease if the energy efficiency rating of the property is an E rating or above. From 1 April 2023, landlords will be unable to continue to let a property with a substandard EPC rating without making sufficient energy efficiency improvements or without a legitimate reason not to do so.
When will a landlord need to consider the regulations?
A commercial landlord needs to be mindful of the regulations if the property is let under a tenancy for a term longer than 6 months and the energy efficiency rating of the property is below an E.
It is important to note that the regulations will not apply if the property is let under a long lease granted for a term of 99 years or more. A sale in itself will also not trigger the application of the regulations.
What should landlords be doing?
Whilst the MEES Regulations do not impose a positive obligation on a landlord to carry out any works to improve the energy efficiency rating of their property, it does expose them to enforcement action if they grant a lease or continue to grant a lease in breach of the regulations.
If the regulations do apply then landlords will be required to carry out the relevant energy efficiency work as defined by the regulations in order to improve the energy efficiency rating of the property.
There might be an exemption or legitimate reason which might apply and if this is the case, the landlord will not be required to carry out any work but this will still need to be formally recorded on the Exemption Register.
Is there anything else to consider?
If you are the landlord of a commercial property that requires energy efficiency improvements, you absolutely must think about the costs involved in improving the property. It is not terribly likely that this is a cost you could look to pass on to your tenant.
There have been discussions about raising the standard above an E rating and so if you are in the process or are planning to carry out the work then in order to avoid having to repeat the process again in the future to bear this in mind.
If you are a landlord of a commercial property and you would like further advice on this contact one of our team here.
The MEES Regulations is the common name for the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (SI 2015/962).