What are MEES Regulations?
The MEES regulations apply to both private rented residential and non-domestic property and are aimed at encouraging landlords and property owners to improve the energy efficiency of their properties. This article only looks at non-domestic properties.
What are the changes?
As of the 1 April 2023, new MEES Regulations will come into force which provide that a landlord of a “sub-standard” (EPC rating of F or G) non-domestic private rented property, must not grant a new tenancy or continue to let the property, unless an exemption applies.
This prohibition will apply to either a lease or sublease of the same property. This, therefore, provides further consideration for tenant’s who are not the landlord, but have underlet the property to a third party.
What are the penalties for non-compliance?
Where the relevant enforcement authority believes a landlord is in breach of the prohibition of letting a sub-standard property, or a landlord has been in breach at any time within the past 12 months, they may serve a compliance notice that requests information to help them decide whether a breach has been committed.
Given that there is a 12 month window this could mean a person may be served a notice after they have ceased to be the landlord and therefore it is good practice to retain any records and documents to demonstrate compliance.
- If the breach is for less than 3 months, a penalty of up to £5,000, or up to 10% of the rateable value of the property (whichever is greater), subject to a maximum penalty of £50,000 can be imposed.
- If the breach is for 3 months or more, a penalty of up to £10,000, or up to 20% of the rateable value of the property (whichever is greater), subject to a maximum penalty of £150,000 can be imposed.
- Where the landlord has registered false or misleading information on the PRS Exemptions Register or where the landlord has failed to comply with a compliance notice, a penalty of up to £5,000 can be imposed.
The enforcement authority also has the option to publish details of the landlord’s breach, including their name (if not an individual), in addition to the financial penalties. These would be publicly accessible on the PRS Exemptions Register and so could negatively impact reputation.
What are the options for Landlords?
A landlord with a sub-standard non-domestic private rented property, who wishes to let/continue to let after 1 April 2023, must ensure one of the following applies:
- Sufficient “relevant energy efficiency improvements” have been made which will result in the property no longer being sub-standard.
- The landlord has made all the “relevant energy efficiency improvements” to the property (even if they do not raise the EPC rating to E or better) and the appropriate information has been validly registered on the PRS Exemptions Register.
- There are no “relevant energy efficiency improvements” that can be made to the property and the appropriate information has been validly registered on the PRS Exemptions Register.
- That the property falls into one of the other very limited exemptions.
Our Commercial Property Team regularly provides advice to Landlords on the potential impacts of the latest legal developments in Property Law. If you would like to contact a member of the team, you can email us or call us at either our Luton Office 01582 731161 or at our St Albans Office 01727 845245.