MEES – yet another increase in costs for landlordsPrint publication
An important change to the exemptions within the Minimum Energy Efficiency Standards Regulations add an extra layer of red tape for private landlords.
The Minimum Energy Efficiency Standard Regulations came into being in March 2015 and from 1 April 2018 it became unlawful for a landlord in the private rented sector to grant a new domestic tenancy, or renew an existing one, if the property did not have an EPC rating of E (or better). From April 2020 this will apply to all existing tenancies (not just when renewed).
Several exemptions are available but exemptions have to be applied for, and they only last for five years. An important change to the exemptions will come into force later in 2019, and that is that the ‘no funding’ exemption is to be removed. Currently, if a landlord cannot obtain funding for the improvements (under the Green Deal or similar scheme) then the landlord can let a property with an F or G rating provided that the exemption is registered. However, that exemption is to be replaced with one stating that the cost of improvements must not exceed £3,500 (including VAT). If the landlord is going to argue that the costs exceed £3,500, then he will need to provide three installer quotes to qualify. Landlords with an existing ‘no cost’ exemption will have that automatically expire on 1 April 2020.
This change is due to come into force in 2019, although no date has been set yet. It is another example of the increased financial burden which is being placed on private landlords, which may lead to increased default and lenders calling in their loans.