Landlords – regulations were updated on April 1st - are you compliant?
Last week was the deadline for landlords to become compliant with the EPC laws for all new AND existing tenancies. Find out what they are - what you can do to become compliant - if your exempt - and what happens if you're found in breach of the rules...
MEES 1st April deadline came last week, despite the Coronavirus pandemic and as such landlords are expected to have their properties at the expected standards.
Since 1st April 2018, Landlords have not been permitted to lease out their property (be that a commercial or residential lease) if the property EPC rating is below an E, without remedial works to improve the rating, unless it falls within one of the permitted exceptions. If the property is a residential tenancy, the landlord was expected to invest £3,500 (inclusive of VAT) on the improvements. If that amount did not bring the rating above an E, the tenancy still complies.
Since Wednesday 1st April 2020, not only do these requirements apply to new tenancies, they are for existing agreements too, whenever the lease was granted.
Sub-Standards Properties
Regulations call properties with EPC ratings of under E ‘sub-standard’, irrespective of the tenancy type. Landlords are duty-bound to carry our works listed in the EPC report as recommendations to improve the rating to at least an E. In the instance of residential tenancies (assured short hold tenancies and regulated tenancies) landlords are not expected to pay more than the £3,500 inc VAT threshold. If the property is still not at a minimum rating of E after these works, the landlord may register an exemption by following this link: https://prsregister.beis.gov.uk/
To register an exemption, you will need to upload your supporting evidence of works and costs. Of course, a single property may be subject to a number of different exemptions that apply to different improvements.
Penalties for breeching this new legislation can reach £5000 for each property.
Exemptions to MEES
Since 1st April 2020, any exemptions previously given (prior to 1st April 2019) due to the lack of obtaining no-cost financing, will cease to apply and all exemptions must be registered, if falling into the following categories:
· The landlord has spent the maximum level of £3500 (inc VAT) but the rating remains below E
· No energy efficiency improvements on the property cost less than the threshold
· A type of consent (such as planning consent) is required for the improvements to be carried out, but that consent cannot be obtained.
Exemptions will last for 5 years at which time they can be extended. Application has no direct cost, although the application process may be time-consuming, for example, where applying for exemption due to the cost of a project, 3 quotes from builders may be required.
The Green Growth Strategy
It is widely believed that bringing minimum standards of all rental properties to a minimum standard of E is only the start. In October 2017 the stated long-term plan was to bring the rating of all privately rented homes to a minimum of a C by 2030. The next steps for this plan were expected for consultation this spring once the 1st April 2020 deadline was reached.
With the present Covid-19 pandemic taking over all focus, it is likely that this consultation, or any enforcement of non-MEES conformity will be delayed. However, for any landlords who are yet to complete works or who need advice and support on reaching the minimum standards, we urge you not to delay. Registering for exemption will be the first step.
MEES Support
If you require help or support through the MEES legislation, please contact our lettings team by emailing lettings@oakwoodhomes.biz.
Our offices are presently closed following advice on lock-down & social distancing from the Government, although we are able to offer guidance via phone and email. If you are considering letting your property in the future or would like to know more about our part- or fully-managed lettings services, please email the same address.