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/ Everything you need to know about MEES

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The Minimum Energy Efficiency Standard regulations (known as MEES) come into force on 1 April 2018. From that date, landlords of commercial and residential properties may have to carry out energy efficiency improvement works before they are permitted to grant a lease.

MEES prohibits a landlord from letting a sub-standard property until sufficient energy efficiency improvement works are made to bring the property up to an E rating. However, for commercial properties, works only need to be made that pay for themselves in resulting energy savings within seven years. Those works are required regardless of whether the landlord has the means of funding them. For residential properties, landlord only need to carry out works for which full funding is available from external sources.

MEES is being phased in. It applies to new lettings of residential and commercial properties from 1 April 2018. In April 2020, MEES is being extended to existing lettings of residential property and in April 2023 to existing lettings of commercial property. MEES does not apply to sales of property.

The MEES regulations apply to lease renewals.

The penalties for non-compliance are:

Commercial property

  • Where a breach has lasted for less than 3 months: up to £5,000 or (if greater) 10% of rateable value, with a maximum penalty of £50,000.
  • Where a breach has lasted for 3 months or more: up to £10,000 or (if greater) 10% of rateable value, with a maximum penalty of £150,000.

Residential property

  • Where a breach has lasted for less than 3 months: up to £2,000
  • Where a breach has lasted for 3 months or more : up to £4,000 per breach (so if 2 lettings granted in breach, then there could be two separate penalties.)

So what does this all mean for you?

If you are a property owner, then you need to ensure you are compliant to avoid any nasty fines.

If you are an existing tenant of non-compliant commercial premises such as offices, retail premises or industrial units, then you need to consider what the implications are on your repair obligations and the usual obligations in a lease to comply with all statutory requirements. You also need to consider what your service charge liability might be where the landlord undertakes works to the common parts or parts of the building not demised to the tenant.

If you are negotiating terms to take a lease of commercial premises such as offices, retail premises or industrial units, then you and your solicitors will need to establish whether the building is compliant and if non-compliant, you will need to consider in your negotiations who is to be responsible for the cost of making the building compliant.

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