8th July 2019
By Stephen Morgan, Partner
Owners of private rental property take note. From April 2020 landlords of domestic rental property can no longer continue to rent them out to existing tenants if they have an Energy Performance Certificate (EPC) of F or G. This includes those tenancy agreements which are due for renewal after 1 April 2020.
The Minimum Energy Efficiency Standards (MEES) Regulations came into force on 1 April 2018. They made it a legal requirement for all privately owned rental property being let to new tenants to have an EPC rating of at least an E. Since then, those with a rating of F or G are deemed to be sub-standard and cannot be rented out. The rules apply to both domestic and commercial properties. Some exemptions exist for listed buildings.
The changes due to come in next April are the next stage in a process aimed at improving the energy efficiency of privately rented homes. They also seek to help the UK reach its carbon emission reduction targets. The aim is for as many of them as possible to be upgraded to EPC band C by 2030. So, the legislation is being extended to cover existing tenancies. The fines for non-compliance are a £2,000 fixed penalty for renting out a non-compliant property for up to 3 months. There is a £4,000 fixed penalty for renting out a non-compliant property for more than 3 months.
From 1 April 2023 MEES will be extended further still to cover non-domestic properties. This includes those where there is a lease or tenancy already in place.
If you own a rental property which has an energy performance rating of F or G you will have to carry out energy efficiency improvements before you can either let it or renew an existing tenancy agreement. Above all, if you’re not sure if your property will comply take professional advice to avoid a penalty.
Stephen is a general practice partner. He joined Wise & Co in 1994 where he trained as a chartered accountant and became a partner in 2006. He acts for a broad range of clients. They include many barristers, and individuals and companies working in the hospitality and leisure sector, and in the media and entertainment sector. Stephen is skilled at providing them with practical advice, dovetailing technical and commercial expertise. Outside work, Stephen remains a keen sportsman!