MEES - Minimum Energy Efficiency Standards
In April 2018 the Minimum Energy Efficiency Standards (MEES) came into force in England and Wales, with the aim of reducing the energy expenditure of commercial buildings, both rented and owned. It is therefore important for developers, landlords, lenders and freehold investors to understand MEES regulations and what is needed to achieve compliance. At kW Energy Consultants we work with property owners across the UK to help them achieve MEES compliance.
For advice on ensuring your EPC meets these regulation or for a quote get in touch today.
The Energy Performance Certificate (EPC) allocates property ratings from A-G in terms of energy performance, to classify the energy efficiency of commercial buildings. Ratings of F to G denote the worst possible performance of a property, and as per MEES, a rating of E is the minimum standard. This E rating standard forbids the selling or renting out of commercial buildings with an F or a G rating.
If a property with an F or G rating is to be marketed, the EPC rating must be improved. At kW Energy Consultants we can analyse your property’s EPC data to produce a MEES report with suggestions of how to implement affordable measures needed to achieve compliance.
Why introduce MEES regulations?
A lowered energy demand is a necessary step towards achieving a healthy and sustainable environment. Unnecessary energy usage has a significant contribution to a country’s carbon emissions. Governments worldwide are beginning to recognise the need for a more energy-efficient building stock. The UK government became the first major economy to pass laws that require the country to bring all greenhouse gas emissions to net-zero by 2050.
As a property owner, it is easy to view the enforcement pressures of MEES regulations as a burden. However, in the long run, your property values can gain a significant boost. Potential clients or property developers typically first analyse the EPC report ratings before making purchasing decisions on a property.
Which buildings and tenancies does MEES apply to?
MEES does not target all properties, buildings and tenancies, and working out if MEES compliance is a requirement is not always straightforward.
There are various exemptions that apply to the prohibition on letting a property with an energy efficiency rating below E. Most are valid for only five years, and only once the exemption has been registered in the exemptions register. The exemptions that are most commonly used are:
All relevant improvements made exemption: applies if all relevant improvements have been made and the property remains below an E rating, or where there are no relevant improvements that can be made.
High-cost exemption: applies if the cost of installing a recommended measure would exceed the £3,500 cap (incl. VAT).
Third-party consent exemption: applies if the property owner seeks to make the necessary energy efficiency improvements, but a third-party refuses to consent, or where consent is given subject to conditions which are unreasonable. The third-party can be an incumbent tenant, mortgagee, freeholder or planning department.
Property devaluation exemption: applies if there is evidence from a qualified, independent expert that making the relevant energy efficiency improvements to the property are likely to reduce the market value of the property by more than 5%.
Temporary exemption due to recently becoming a landlord: New landlords may claim a 6 months exemption from the date of becoming a landlord to avoid having to take immediate action to improve an EPC rating on a property.
‘7 Year Payback’ exemption: applies where a recommended measure is not a “relevant energy efficiency improvement” because the cost of purchasing and installing it does not meet the 7 Year Payback test. A specific methodology is used for calculating this and you are advised to engage the services of an energy professional to perform these calculations.
The ‘Wall Insulation’ Exemption: recognises that insulation may not always be suitable. If applicable, expert advice must be sought from an architect, chartered engineer, chartered building surveyor or chartered architectural technologist.
The LWMAs (Local Weights and Measures Authorities) are responsible for enforcing the MEES regulations. An imposed civil penalty by the LWMAs is directly proportional to the target property value. If a commercial property is rented despite breaching MEES regulations, the penalty will depend on the rental period:-
If it is three months or less, the penalty is 10% of the rateable value of the property. The minimum to maximum scale of the penalty amount, in this case, is £5,000 to £50,000.
If the rental period exceeds three months, the penalty becomes 20% of the rateable value of the property. The minimum to maximum scale of the penalty amount, in this case, is £10,000 to £150,000.
However, a breach of the MEES regulations will not affect the status of a property lease. The valid agreement between the two parties that generated the contract will still be in effect.
Why choose kW Energy Consultants for MEES?
If you’re looking to sell or rent a property which currently doesn’t achieve MEES compliance then kW Energy Consultants are here to help. Although it may be frustrating, the Minimum Energy Efficiency Standards have an important role to play in the nationwide effort to reduce energy consumption, and they can also provide long term financial benefits to you as the property owner. To find out more about how we can help you with MEES compliance, get in touch by calling 07837 941220, or email us at firstname.lastname@example.org and we will get back to you shortly.