Minimum Energy Efficiency Standards (MEES): Commercial Landlords Beware

Due to new legislation introduced in March 2015, a Minimum Energy Efficiency Standard (MEES) will take effect as of 1st April 2018, imposing new rules on both domestic and commercial properties within the private rental sector.

These new rules will prohibit landlords from granting a tenancy to new or existing tenants if the property has an Energy Performance Certificate (EPC) rating below band ‘E’.

Commercial landlords that fail to comply with the new legislation could face fines of up to £150,000.

What is MEES?

Under the current EPC framework, all commercial buildings maintain an energy efficient rating of ‘A’ through to ‘G’, with ‘F’ and ‘G’ representing the worst performing properties.

However, the new Minimum Energy Efficiency Standards legislation will mean that, as of 1st April 2018, commercial landlords will not be allowed to grant a tenancy on a building if it has an EPC rating of band ‘F’ or ‘G’. It is estimated that as much as 20% of commercial properties in the UK will would fail to meet the new standards, meaning some landlords may be under a lot of pressure to ensure their properties maintain an EPC of ‘E’ or higher.

Even properties that currently hold an EPC rating of ‘E’ may be at risk under the new legislation as the standards for achieving an ‘E’ grade are tougher than when EPCs were introduced.

Will it affect my business?

There are a number of exemptions which may mean the new legislation does not apply to you. Currently, MEES does not apply to:

  • Buildings not required to hold an EPC, such as industrial sites, certain listed buildings or temporary workshops
  • Buildings with an EPC older than 10 years or where there is no EPC
  • Tenancies of a term shorter than 6 months (with no right of renewal) or longer than 99 years

Whilst landlords of industrial sites seemingly need not worry about the new legislation, there is a plethora of eligible commercial buildings required to uphold MEES, such as retail or hotel properties.

MEES Timeline: when and what?

Commercial landlords for properties affected by the introduction of MEES should diarise the following dates:

1st April 2018: Landlords cannot grant a new tenancy for properties with an EPC rating below band ‘E’

1st April 2023: Commercial landlords can no longer continue to let a property with an EPC rating of ‘F’ or ‘G’ (below band ‘E’) to existing tenants

If landlords fail to make the required improvements to increase the EPC rating of a property to band ‘E’ or higher, they cannot legally let the property, and letting the property anyway could see them fined a minimum of £10,000 up to as much as £150,000 per property.

In addition, failure to meet the required EPC rating could render the sale of those properties extremely difficult.

What should businesses do now?

MEES poses a significant financial and logistic risk to both commercial landlords and tenants where eligible buildings are currently rated in the EPC band of ‘F’ or ‘G’. Therefore, it is important that landlords act quickly to achieve EPC ratings of ‘E’ or higher before 1st April 2018 to prevent lost capital through property downtime.

Landlords should consider organising a full energy audit on their eligible properties and review and assess the technologies and solutions available to help meet the new standards. If your building(s) don’t currently hold an EPC, but are not exempt from MEES, you should arrange an assessment to receive one through the EPC Register as soon as possible. When given an EPC a building will also be issued an associated energy report indentifying energy efficiency improvements that can be made to help reduce energy costs and CO2 emissions.[1]

Buildings with long opening hours and high energy consumption, such as the aforementioned retail or hotel properties, can benefit from a range of engineered solutions to reduce its energy consumption, minimise electricity costs, and offer sustainable benefits.

Powerstar, market leaders in energy saving technology, specialise in engineering-led energy storage and voltage optimisation solutions, and have helped thousands of sites across a multitude of sectors reduce their energy consumption and CO2 emissions as well as save money on electricity bills.

After undertaking a full energy analysis and monitoring of a site’s electrical supply, Powerstar will determine if energy storage or voltage optimisation technology will be beneficial to the client and propose a fully bespoke, tailored solution engineered specifically to the characteristics and requirements of the facility. Whilst Powerstar’s energy saving technology will not directly affect your EPC rating, it provides significant benefits by reducing CO2 emissions, energy consumption and electricity bills.

Since the company was founded in 2001, Powerstar’s award-winning solutions have provided energy consumption savings, above its 100% minimum guarantee, for retail and hotel clients such as ASDA and Whitbread Plc, with full client case studies available to view on their website.

For more information on voltage optimisation and energy storage, or to arrange a no-obligation site survey, visit the Powerstar website at www.powerstar.com

 

[1] https://www.epcregister.com/                                                                           


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