02 April, 2020
The 1 April 2020 will mark a change in the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (MEES Regulations). This change will have a direct effect on landlords of residential properties with potential financial penalties and subsequent reputational damage.
We will consider the changes for residential landlords below while keeping one eye on the changes forthcoming for landlords of commercial properties.
On 1 April 2018 the law changed and new rules set out the criteria for the minimum energy efficiency standards on certain residential properties. A landlord was forbidden from granting a new lease if the EPC rating dropped below an E rating (ratings are A (high)- F (low)). This applied to all residential properties unless registered as an exemption - this includes certain types of properties, certain types of landlords and specific types of tenancy.
From this date the MEES regulations will affect all rental properties irrespective of the length of tenancy. It will be unlawful to rent any property with a tenancy already in place (lease granted on or before 1 April 2018) or a continuing tenancy that does not meet the minimum E rating.
Landlords of commercial property will have a little longer before the same restriction affects them with the same ban coming in to force on 1 April 2023.
Landlords need to protect their assets by:
The key exemptions available are:
Landlords leasing a sub-standard property may face enforcement action by local authorities. The possible outcome of such enforcement action where the property is less than three months in breach could include a fine of up to £5000 or 10% of a rateable value up to a maximum if £50,000, whichever is greater.
If the property is three months or more in breach they may be fined up to £10,000 or 20% of the rateable value up to a maximum of £150,000, whichever is greater.
There is also a fine of up to £5000 for providing false or misleading information or failing to comply with a compliance notice.
There is continued governmental consideration into raising the minimum acceptable EPC standard to 'D', so these regulations are more valid than ever before.
The current restrictions in place mean that we should all be staying at home where possible and that travel to work should only take place where absolutely necessary. There is also a shortage of workpeople and materials due to these restrictions. This will of course have an impact upon Landlords' abilities to effectively take action to remedy any non-compliant properties.
In line with the government guidance any work being undertaken that may include attending property should be absolutely essential and should only be completed having undertaken a full risk assessment to include: -
For more information contact Henry Prescott in our Commercial Property department via email or phone on 0333 207 1163. Alternatively send any question through to Forbes Solicitors via our online Contact Form.