Hull law firm advises property owners to be aware of changes

By Hull Daily Mail | Posted: 10 Jan 2018

COMMERCIAL property landlords are being warned that new energy efficiency protocols will be introduced on April 1, and they may be penalised if they do not make necessary improvements. 

Properties put up for let or renewal after April will have to meet a minimum E rating of energy efficiency or could face a penalty from £5,000 to £150,000. 

A Hull law firm has warned landlords that they should start making preparations to make sure they are not caught out by the change in legislation.

Steven Berry, a partner in the property team at Andrew Jackson Solicitors LLP, says one fifth of rented properties are “sub-standard” and the new rules will help to reduce energy costs as well.

He said: “With MEES just a few weeks away, it’s vital that parties understand fully how their properties will be affected. Non-compliance could result in increased costs and/or penalties. Government guidance has been published, but there are still areas of uncertainty. 

“Meeting the new standard – currently EPC grade E – makes sense. About 20 per cent of the rental stock is sub-standard. Improving it will help reduce energy costs and greenhouse gases, as well as enhancing  
property values and providing employment. 

“MEES applies only to properties, which are required by law to have an EPC. It doesn’t apply, for example, to certain buildings which have a low energy demand. In broad terms, properties that are let for less than six months or more than 99 years are also excluded.”

Mr Berry says there are significant penalties for any landlord, which breaches the new legislation.

He said: “If MEES applies, then, subject to non-transferable exemptions, it must be met before a new lease (or a renewal of an existing one) can be issued and, from 1 April 2023, before the property can continue to be let. 

“Where an exemption applies, the property can be let even if it is sub-standard. Exemptions include where reasonable steps have been taken to obtain any required third party consent for the works without success, or where independent surveyors advise that the works would reduce the market value of the property by more than 5 per cent. 

“There are significant penalties (£5,000 to £150,000 for a single breach) and the breach(es) may be published and cause reputational damage.”

The partner at Andrew Jackson says there are a number of things that landlords should do now in preparation for the changes. 

He said: “Landlords should check whether or not MEES applies and look critically at EPCs with a level of F or G in case they are flawed. 

“They must undertake audits to see if an exemption applies and register any applicable exemption on a new and in part public self-certified register.

“People should check whether the lease allows the landlord to carry out upgrading works and recover the cost of them. 

“On new lettings, they should consider provisions specifying things such as minimum energy efficiency requirements. And people should also keep MEES under review, as circumstances and requirements will change.”

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