Minimum Energy Efficiency Standards for residential properties

New Regulations in force from 1 April 2018 means that any properties let out in the private rented sector must meet certain energy efficiency standards. Read this guide for further information on the Regulations and how they apply to you.

Get started

Create your Tenancy agreement

Answer a few questions. We'll take care of the rest

What are Minimum Energy Efficiency Standards?

Minimum Energy Efficiency Standards (MEES) are the required minimum level of energy efficiency for privately rented property in England and Wales. The new Regulations set out the legal requirement for privately rented properties to have a minimum Energy Performance Certificate (EPC) rating of E or above.

When do the MEES apply?

From 1 April 2018, landlords will be prohibited from granting new tenancies for properties with an EPC rating below E. This includes extensions and renewals of existing tenancies, or a tenancy becoming a statutory periodic tenancy following the end of a fixed-term. This means that landlords must not let out any substandard property to new tenants or renew or extend existing arrangements with existing tenants.

From 1st April 2020, this restriction on landlords letting out band F or G rated properties is extended to cover all existing tenancies for properties in scope of the Regulations. This means that all landlords must not rent out any property that has a substandard energy rating from 1 April 2020 which includes periodic tenancies and existing tenancies still in their fixed-term.

What types of tenancies are covered by the Regulations?

The Regulations apply to most privately rented property in England and Wales. It covers the following tenancy types:

  • an assured shorthold tenancy
  • a regulated tenancy
  • an agricultural tenancy

Do all properties need to be band E?

The Regulations only apply to domestic properties which are legally required to have an EPC. Properties within the scope of the Regulations will include any domestic privately rented property which has an EPC and is required to have an EPC. This means that a 'trigger point' for an EPC (ie the sale or letting of a property) will bring a property within the scope of the Regulations. If a property doesn't need to have an EPC then the Regulations do not apply. For further information read Energy Performance Certificates.

Furthermore, it will only be from the 1 April 2020 that all rented properties be at a minimum of EPC band E (or have a valid exemption registered). Between 1 April 2018 and 1 April 2020 properties will only need to meet the standard at the point at which a new tenancy is entered into. Where no tenancy has been entered into, a private rental property may be lawfully let below EPC band E up until 1 April 2020.

How can landlords comply with the Regulations?

There are no specific materials or improvement measures landlords must take. Landlords are free to do whatever they like as long as they improve the EPC rating to meet the MEES. The EPC is the most accessible source of advice as the EPC will set out energy recommendations for the property.

These improvements are only required if they can be made to the property at no cost to the landlord. Some funding options can be from (but not limited to):

Green Deal Finance

The Green Deal enables property owners to take out loans to pay for energy efficiency improvements in their homes or rental properties, with repayments made through the electricity bill for the improved property. Repayments are made on a 'Pay As You Save' (PAYS) basis. After the improvement has been made, the household begins to save energy and the energy bills are less than they would have been without the improvements. These savings are used to repay the loan. The finance mechanism also includes a 'Golden Rule' principle which states that the first year's repayments must not exceed the estimated first year saving, and the overall repayment period must not exceed the lifetime of the measures installed. This is one way that landlords can meet their legal obligations with no up-front costs to them. Search for a local Green Deal Provider on the Green Deal Finance Company website.

Exclusions and exemptions

There are only a few exemptions to the Regulations that landlords can use. Landlords seeking to make use of one of the following exemptions must ensure it is registered on the PRS Exemptions Register, operated by the Government.

If a landlord has undertaken all 'relevant energy efficiency improvements' but the property remains below an energy rating of E, or no such improvements can be made to the property, then the landlord would be eligible for an exemption. A 'relevant energy efficiency improvement' is one which has been identified as a recommended improvement for the property either in the EPC or a report prepared by a surveyor and can be wholly financed, at no cost to the landlord, by means of funding provided by the central government, local authority or other person.

Whilst there is no requirement for a landlord to seek permission from a tenant to install energy efficiency measures, the tenancy agreement may state that the landlord needs to obtain tenant permission before undertaking certain works. Where the tenant has not given permission, then the exemption is only valid until the end of the tenancy or after 5 years, whichever is sooner.

Other exemptions include:

  • The landlord has only recently become the landlord for the property (this exemption only lasts for 6 months). Third party consent is required but this consent cannot be obtained (eg planning permission or consent from a mortgage lender).
  • Improvements made to the property as determined by an expert and independent surveyor show that there will be a capital devaluation of the property of more than 5% (This means that the value of the property will decrease as a result of any improvements).

Ensure that you register any valid exemptions on the property on the PRS Exemptions Register. You will need to submit evidence and details of your exemption to the Register. Examples of supporting evidence include letters from a local authority or Green Deal provider confirming that funding for the improvement is not available. The Government may use this information to assist local authorities in targeting their enforcement activity.

Enforcement of the Regulations and penalties for non-compliance

Every Local Authority will be an 'enforcement authority' for their area. Each Local Authority is responsible for enforcing compliance with the minimum level of energy efficiency. Where a Local Authority suspects that a landlord with a property in scope of the Regulations is not compliant, or has not sufficiently proved an exemption, the Local Authority can serve a compliance notice on the landlord requesting further information it considers necessary to confirm compliance. If it is not provided, or is provided and is not sufficient to provide compliance, the Local Authority may proceed to issue a penalty notice.

Where a Local Authority decides that a financial penalty is necessary, they have discretion to decide on the amount.

Penalties for a single offence may be cumulative, up to a maximum of £5,000. Further penalties may be awarded for non-compliance with the original penalty notice where a landlord continues to rent out a non-compliant property; however, penalties would be cumulative up to a maximum of £5,000. The financial penalty can be issued in relation to each property. Therefore if a landlord has multiple properties, they can be fined for each non-compliant property.

The Local Authority may also issue a publication penalty. This means that the enforcement authority will publish some of the details of the landlord's breach on a publicly accessible part of the PRS Exemptions Register. The information in the publication penalty can contain:

  • the landlord's name (except where the landlord is an individual)
  • details of the breach
  • the address of the property which is non-compliant
  • the amount of any financial penalty imposed

Appealing decisions

Landlords may appeal any penalty notice on the basis that the penalty notice was issued in error, the penalty does not comply with the Regulations, or that it was inappropriate in the circumstances for the penalty notice to have been served. The appeal would be heard at the First-Tier Tribunal (General Regulatory Chamber).

Get started

Create your Tenancy agreement

Answer a few questions. We'll take care of the rest