Landlords could face large fines under new Minimum Energy Efficiency Standards
Under the Minimum Energy Efficiency Standards (MEES) which come into force from April 1, 2023, it will be an offence to continue to let a non-domestic property with an Energy Performance Certificate (EPC) rating of below E.
And while there will be some exemptions, most landlords of commercial property now have a six-month deadline to make sure sites with an EPC of F or G are improved so that they meet the new minimum standard and can continue to lease them out.
It’s something we have been advising clients on at Bromwich Hardy for some time - with our property management team leading the way in keeping clients up to speed with the new legislation.
What the changes mean is that from April 1 2023 landlords will have to have a legitimate reason for continuing to let a sub-standard property - that is one with an EPC rating of F or G.
Failure to comply could mean a fine of between £10,000 and £150,000 per breach, with fines being based on the rateable value of the property in question.
The legitimate reasons are that all relevant energy efficiency improvements have been made to the property even though it still falls below the minimum EPC rating, or that a valid exemption is in place.
Exemptions will be applied if the landlord has been unable to obtain consent to do the relevant works from the tenant or a third party such as the local planning authority; all cost-effective improvements have been made but the property is still rated below E or that the work required will devalue the property.
These exemptions must be registered and will need to be renewed every five years to remain in place.
The legislation places a new onus on landlords, investors, and developers who will need to consider how much making the necessary improvements will cost, the likely loss of rental income if they fail to do so and the financial impact of non-compliance.
We recommend any landlord to review their building stock to see if they need to act now to meet the new requirements and also consider if they qualify for exemption.
Now is the time to seek expert advice and the team here at Bromwich Hardy will be happy to help.
13 October 2022