Over the last few years, the Government has been making a concerted effort to improve the energy efficiency of Britain's housing stock.
The benefits of this are twofold. Firstly, increased energy efficiency in homes leads to a lower carbon footprint and a step forward in the fight against climate change.
Secondly, homes which are more energy efficient benefit consumers in the form of lower energy bills and more comfortable living conditions.
One of the Government's key initiatives in this regard is the Minimum Energy Efficiency Standards (MEES), which focuses on the Private Rental Sector (PRS).
Since MEES was announced, one of the key concerns and points of confusion for landlords has been how the legislation can be applied to listed buildings and properties in conservation areas.
With this in mind, we've put together an update for landlords who let these types of properties.
A MEES recap
On April 1 2018, it became illegal for landlords to issue a new tenancy to new or existing tenants if their property had an Energy Performance Certificate (EPC) rating of F- or G-.
Two years later, on April 1 2020, landlords could no longer let or continue to let properties covered by the MEES Regulations if they have an EPC rating below E unless they have a valid exemption.
In 2021, it was proposed by the government that the minimum EPC rating will rise again to C in 2025 for new tenancies, and 2028 for all existing tenancies. This means landlords only have a few years to make the required improvements to their properties - and reaching C will be much more difficult and costly than reaching E.
Are listed buildings and properties in conservation areas exempt from MEES?
The simple and not-so-helpful answer here is: maybe. There has been much criticism of the official MEES guidance for leaving landlords in an ambiguous situation where it is difficult to interpret the rules.
According to the official guidance, an EPC is not required for a listed building or property in a conservation area if energy improvement requirements would ‘unacceptably alter’ the property’s character or appearance. In this case, the property would also then be and landlords would still be able to let it even with an EPC rating below E.
The problem here is how can a landlord determine whether EPC requirements would ‘unacceptably alter the character or appearance’ of the property without an EPC in the first place?
The widely advised solution to this problem is to obtain a draft EPC to see what works are recommended and whether they would deem the property exempt from needing an EPC and, therefore, from MEES too.
The next obstacle is that some recommendations could be unobtrusive, while others could be seen as unacceptable. In this instance, the landlord has to decide what could or could not be done and the subsequent effect any works would have on the property’s EPC rating.
The key to remember here is that exemptions to EPC rules when it comes to listed buildings and properties in conservation areas are carried out on a case-by-case basis. If a landlord has doubts over what can be deemed ‘unacceptable’, the official guidance encourages them to seek the advice of their local planning authority’s conservation officer.
So, the suggested plan of action if you’re letting a listed building or property in a conservation area is as follows:
- Commission a draft EPC.
- Determine whether the suggested works entitle you to register for an exemption (with the help of the local authority if required).
- Depending on which route you go down, take the required action of registering for an exemption or carrying out the recommended works to secure an EPC rated E- or above.
As you can see from the above, the guidance is certainly not clear-cut and remains open to interpretation.
The penalties for not complying with MEES are substantial, and not issuing an EPC at the start of a tenancy (if one is required) could cause problems if you later try to issue a Section 21 eviction notice. With this in mind, if you’re unsure whether your property is eligible to be exempt from requiring an EPC or from MEES, it could be worth your while to seek independent legal advice to ensure you’re covered and take the right course of action.