Changes to EPC Regulations 1st April 2018
The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 establish a minimum level of energy efficiency for privately rented property in England and Wales. This means that, from April 2018, landlords of privately rented domestic and non-domestic property in England or Wales must ensure that their properties reach at least an Energy Performance Certificate (EPC) rating of E before granting a new tenancy to new or existing tenants.
These requirements will then apply to all private rented properties in England and Wales – even where there has been no change in tenancy arrangements – from 1 April 2020 for domestic properties, and from 1 April 2023 for non-domestic properties.
The National PRS Exemptions Register
As of 1 April 2023, landlords must not continue to let any buildings which have an EPC rating of less than E unless they are exempted.
Who do MEES apply to?
Except as set out below, MEES Regulations apply to all properties requiring an EPC including all residential tenancies let under AT, AST or Company Let. It does not apply to licences.
The MEES Regulations will not apply to the following:
- Buildings which are not required to have an EPC such as industrials sites, workshops, non-residential agricultural buildings with a low energy demand, certain listed buildings, temporary properties and holiday lets;
- Buildings where the EPC is over 10 years old or where there is no EPC;
- Tenancies of less than 6 months.
- Tenancies of over 99 years.
What are the exemptions?
There are several exemptions from compliance and therefore allow a property to be legally let with an EPC rating below “E”:
- Where third party consent is denied- where consent from person such as a tenant, a superior landlord or planning authorities is refused or has been given with conditions with which the landlord cannot reasonably comply;
- If energy efficiency improvements would negatively impact the value of the property or:
- If all improvements possible at no upfront costs to the landlord have been undertaken but the rating is still below an “E”.
In all instances, the exemptions are only valid for five years and cannot be transferred to a new landlord. Also, all exemptions must be registered on the central government PRS Exemptions Register.
Penalties for Non-Compliance
Local Weights and Measures Authorities (LWMAs) will enforce the new regulations and will have powers to impose civil penalties determined by the property’s rateable value. If a let property is found to be in breach of the MEES Regulations and a penalty is imposed, the lease between the landlord and the tenant remains valid and in force. Where the breach is for less than three months, the fine will be the equivalent of 10 per cent of the rateable value of commercial properties, subject to a minimum penalty of £5,000 and a maximum of £50,000 and £2,000 for residential properties. Where the breach is for more than three months, the fine will be the equivalent of 20 per cent of the rateable value for commercial properties subject to a minimum penalty of £10,000 and a maximum of £150,000 and £4,000 for residential properties.
If a Landlord breaches the MEES Regulations, the breach will be published on the exemptions register for a minimum of 12 months. Below is the Government Guidance for landlords