In just over one year, regulations called the Minimum Energy Efficiency Standards (MEES) will make it a legal requirement for certain privately rented properties to have minimum levels of energy efficiency.
This rule will not only apply to buy-to-let investors and those with large housing portfolios, but to people who let just one or two dwellings.
The minimum level of energy efficiency is measured by the energy performance certificate (EPC), which is required for most properties when built, sold or let.
The EPC provides details on the energy performance of the property and what you can do to improve it. Performance is rated on a scale of A-G, with band A being the most efficient.
From April 2018 it will be illegal for a private landlord to let a property to a new tenant if the property has an EPC rating lower than E, with further regulation making it illegal to let a property to an existing tenant if the property has an EPC rating lower than E from April 2020.
Most residential properties in the UK achieve a band D rating.
However, properties in rural areas are over-represented in the F and G bands due to their pre-1919 construction from stone or solid brick and the heating systems they use.
Of course, improving the energy efficiency of any property is a good idea and a sound investment.
Building stock in the UK is the worst in Europe for greenhouse gas emissions with 25% of our carbon dioxide output coming from domestic property.
To put that into context, the agricultural sector accounts for about 9% of the UK’s carbon dioxide emissions.
Will the new rules apply to my let property?
To understand whether your property falls within the scope of the MEES regulations there are two questions to answer – is my property legally required to have an EPC and is my property let on a tenancy type covered by the regulations?
If the answer to both is yes and your property has an EPC rating of F or G you will have to comply.
Landlords have been required to provide an EPC when they rent out a home since October 2008 so if you have created a new tenancy since then you should have an EPC already.
Crucially, an EPC is not required for any property occupied before October 2008 and which continues to be occupied after that date by the same tenant.
So if you have long-term tenants, until there is a change in tenancy you are not required to have an EPC, and therefore not required to comply with MEES.
If your existing tenant moves out and you wish to re-let the property, you are then legally required to get an EPC.
Dependent on the band your property falls in, it may or may not have to comply with MEES.
Neither agricultural holdings nor farm business tenancies have been specified in the regulations defining domestic properties. Therefore, they do not have to comply with MEES.
However, if a property let under an FBT tenancy or an AHA tenancy is then sub-let on one of the tenancy types covered in the regulations, that property would then have to comply with MEES. It would be the responsibility of the person sub-letting the property to make sure it has an EPC rating of E or above.
Tenancy types included in the regulations are:
- Assured shorthold tenancies under the Housing Act 1988
- Assured tenancies under the Housing Act 1988
- Rent Act 1977 tenancies
- Assured agricultural occupancy tenancies under the Housing Act 1988
- A protected occupancy under The Rent (Agriculture) Act 1976
- A statutory tenancy for the purposes of the Rent (Agriculture) Act 1976
If you are letting out a property that is not on one of the tenancies above or does not require an EPC you will not have to comply with MEES.
Frustratingly, the government is yet to finalise a number of issues fundamental to the MEES regulations but having an understanding of whether your property is included within their scope is an important first step.