On 1st April 2018, Minimum Energy Efficiency Standards (MEES) came into force in England and Wales, making it illegal to let or renew an assured tenancy – including letting a statutory periodic arise - on a domestic property rated F or G on the EPC, unless you registered an exemption. As of 1st April next year, that will be extended to all properties let privately on an assured tenancy.
As such, there are a number of important things for you to know.
- If your rented property is still currently rated F or G, review your EPC as soon as possible. It indicated what changes you can make to increase the rating. You must ensure it either gains a minimum rating of 'E' or has a valid exemption before 01 April 2020
- If you need your property to be reassessed, we can organise this for you and if you don't have the paperwork to hand, visit our site and you can access the EPC register free of charge
While that might not be 'new' news, there have been changes to the rules around the cost of funding improvements and some exemptions, which came into effect from 01 April 2019 which you may not be aware of:
- The government has imposed a personal ‘spending cap’ of £3,500 (including VAT) for the cost of improvements. That means you don’t have to spend any more of your own money than this on works to bring a property up to an ‘E’ rating.
- If it would cost you, personally, more than £3,500 to bring an ‘F’ or ‘G’ rated property up to standard, you must simply do as much as possible for £3,500 and then register a ‘high cost’ exemption, but do seek advice on the work you do.
- If you have been able to secure third-party funding to help with the cost of making energy efficiency improvements (e.g. via a grant) this does not count towards the cap of £3,500, which only applies to your own personal spend.
- The ‘no cost to the landlord’ exemption has been discontinued. If you previously had an exemption registered because you were unable to fund energy efficiency improvements, this will end on 31st March 2020.
- It also used to be the case that if a sitting tenant withheld consent to a Green Deal finance plan, you could register an exemption on those grounds. This has now been removed, i.e. a tenant cannot refuse to permit necessary energy efficiency improvement works to be carried out.
These changes mean that you may now need to spend £3,500 on making improvements to bring your property up to (or approaching) standard, regardless of whether that is affordable for you.
- If you fail to comply, your local authority can fine you up to £5,000, which could be made up of various penalties, including:
- If you fail to comply with a council-issued compliance notice - a fine of up to £2,000
- If you have breached regulations for 3 months or more - a fine of up to £4,000
- If you enter false or misleading information on the PRS Exemptions Register - a financial penalty of up to £1,000
- The good news is that the likelihood of you having to pay out the full £3,500 is slim. According to Which? it costs an average of £1,200 to upgrade older properties to an EPC grade E.
- The average EPC rating for a home in the UK is 'D', so this requirement is certainly not unreasonable.
If you have any questions, simply call into your local Reeds Rains branch and one of the lettings team will be happy to discuss your options.