Navigating the Latest Update to MEES Legislation

In this edition of AG Insights, we delve into the latest update to the Minimum Energy Efficiency Standards (MEES) Legislation, effective from April 2023.

Obligations and Future Targets

Starting from April 1st this year, all leased commercial buildings without a valid MEES exemption must have an Energy Performance Certificate (EPC) rating of E or higher. Looking ahead, it is anticipated that the requirements will become even more stringent, with a C rating expected by 2027 and a B rating by 2030. It’s important to note that these changes will impact both new and existing leases.

For residential properties, the original deadline for landlords to achieve a C rating by 2025 has been extended to 2028. While this extension provides some breathing room for landlords in the private rental sector, it is advisable to stay ahead of the legislation, especially considering recent energy price hikes and the cost of living crisis. Providing quality housing is not only an ethical choice but also a smart one for landlords.

Taking Action

Knowledge is power when it comes to compliance with MEES Legislation. Attempting to bring a sub-standard building up to code through guesswork is not only challenging but also inefficient. To formulate an effective strategy for improving your buildings’ EPC ratings, it is recommended to conduct a thorough assessment by a qualified Energy Assessor. While automated recommendations generated by reporting software can be useful, they often overlook crucial aspects such as the building’s fabric and usage. By leveraging the expertise of Building Surveyors, you can create a comprehensive strategy that aligns with your budget, building plans, and energy efficiency goals.

It’s worth noting that existing EPC ratings may no longer be valid if the same building were assessed today. This is because the algorithm used to calculate ratings changed in June 2022, which altered the weightings assigned to cost and carbon factors. Relying solely on the current C rating of a building may lead to an unpleasant surprise during reassessment when the certificate expires.

Practical Steps

While there is no one-size-fits-all approach in the commercial property sector, removing gas heating and adopting electric alternatives can significantly enhance energy efficiency ratings. In residential properties, improving the insulation of the building envelope not only boosts EPC ratings but also enhances tenant comfort while reducing energy bills. Solar PV is also an idea worth exploring.

Penalties for Non-Compliance.

The consequences of non-compliance with MEES Legislation can be severe. For commercial landlords, fines are calculated based on 10-20% of the building’s rateable value, with a minimum fine of £5,000 and a maximum of £150,000. The fines for residential properties are not as clearly defined. However, discussions within the Department for Energy Security and Net Zero have hinted at potential fines of £30,000 for landlords found to be renting non-compliant properties starting in 2028.

Exemptions and Considerations

While exemptions may not align with the decarbonisation goals of the UK’s built environment, they are available to landlords in both the residential and commercial sectors. For instance, in residential properties, the spending cap for exemptions is set to be raised to £10,000 from the current £3,500. This means that if landlords spend up to £10,000 on a property to improve its energy efficiency and it still fails to meet the compliant rating, they will be eligible for an exemption.

Commercial properties can also leverage exemptions, such as the consent exemption, which allows landlords to forego EPC upgrade works if existing tenants deny access to the required improvements.

At AG, we understand the complexities and importance of navigating the ever-evolving MEES Legislation. By staying informed, seeking expert advice, and taking proactive measures to improve energy efficiency, landlords can ensure compliance, avoid penalties, and contribute to a sustainable built environment.

If you need assistance in understanding and implementing the MEES Legislation requirements or have any other property-related concerns, let’s talk.