Requirements for Minimum Energy Efficiency Standards (MEES) and EPC Ratings in Residential and Commercial Properties
Read time: 6 minsThe Minimum Energy Efficiency Standards (MEES) require residential and commercial properties in England and Wales to achieve a minimum EPC rating of E before they can be legally let, unless a valid exemption has been registered. Landlords are responsible for undertaking reasonable energy-efficiency improvements, subject to cost and feasibility limits, with specific exemptions available where works are uneconomical, would reduce property value by more than 5%, or cannot be completed due to planning restrictions or lack of access.
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The current Minimum Energy Efficiency Standards (MEES) provide that a property cannot be let unless it has an EPC rating of E or above or a valid exemption.
There is an obligation on landlords to make necessary improvements to a property to ensure that it meets with the required MEES. For residential properties, currently, landlords are only required to spend a maximum of £3,500 on such improvements. If the EPC is still not higher than an F then the landlord would be able to register an exemption. For commercial properties, if the cost of the works would not be recouped in savings in 7 years then again there is an exemption (all exemptions must be registered). You should discuss this with your surveyor who will have further details on this.
If MEES are not met then the lease would still continue in force and would be enforceable however, the landlord is likely to face a fine and be named and shamed on the government website.
1. Exemptions
Other exemptions include where completing the works would devalue the property by more than 5%. Please note that this is in relation to each specific requirement (so if an EPC details that the property should be rendered and LED lightbulbs used, but the rendering would devalue the property by more than 5% then this does not need to be done but the LED light bulbs should still be installed).
If the landlord cannot get the requisite permissions to complete the necessary works on the property (either from the Council by way of planning or other permission, or if the tenant refuses the landlord access) then the landlord will also be able to register an exemption.
If a property is acquired then the new owner will have a 6 month grace period in which to complete any necessary work. This is also a form of exemption.
All exemptions must be registered to apply and must be reviewed every 5 years. Evidence will need to be provided with the registration of the exemption to evidence that the same is in existence. In the case of the costs exemption referenced above this would include providing at least three quotes for the proposed works to show that they would exceed the maximum required spending.
2. EPCs
Landlords should also speak with their surveyors about the best time to do an EPC. If the landlord is intending to do an EPC at the end of a tenancy they should discuss with their surveyor whether it is worth waiting for the tenants to have vacated, or whether a more favourable EPC may be granted if the EPC is completed while the tenants are still in situ, particularly if the tenants will be removing any fit out works.
There are government proposals for higher MEES to come into effect in the future and currently there is some suggestion that eventually the MEES will be a B rating on an EPC. In reality it is unlikely that some properties will ever be able to achieve a B rating and as such it is likely that if this comes into practice most landlords will complete the works necessary and then register for an exemption. This will cause significant work for landlords who will need to keep exemptions under review every 5 years and ensure that EPCs are kept up to date.
None of the government’s future proposals are yet set in stone and it may be that what happens differs from the above however, there is a drive to bring leasehold properties up to standard which will mean we will no doubt see further developments in this area in the future.
Frequently Asked Questions
What is the minimum EPC rating required to let a property?
Under the current MEES regulations, landlords must ensure that a residential or commercial property has an EPC rating of at least E before it can be legally let, unless a valid exemption applies. There is a possibility that this will be increased to a C in the coming years.
What happens if my property does not meet the minimum EPC standard?
A landlord may face financial penalties and be publicly listed on the government’s compliance register. However, the lease itself will generally remain valid and enforceable.
Are there any exemptions to the MEES requirements?
Yes. Common exemptions include:
- Improvement works exceeding the applicable spending limit.
- Works that would reduce the property’s value by more than 5%.
- Inability to obtain required planning permissions or third-party consents.
- A tenant refusing access for improvement works.
Do MEES rules apply to both residential and commercial properties?
Yes. MEES regulations apply to both sectors, although the exemption criteria and cost considerations differ between residential and commercial properties.
Do all recommended EPC improvements need to be completed?
Not necessarily. If a specific improvement qualifies for an exemption, the landlord may not be required to undertake that particular work. However, other recommended improvements that do not qualify for an exemption may still need to be completed.
Examples
Example A
Residential property improvement required
A landlord owns a residential property with an EPC rating of F. The EPC recommends loft insulation, cavity wall insulation, and upgrading to LED lighting. The landlord spends £2,700 on the recommended improvements, increasing the rating to E. The property can continue to be legally let without requiring an exemption.
Example B
Cost cap exemption for a residential landlord
A residential property has an EPC rating of G. The recommended works would cost £7,000. The landlord spends the maximum required amount of £3,500, but the property only improves to an F rating. As the required rating is still not achieved, the landlord can register a valid exemption and continue letting the property.
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Nicole Gibbs
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Yasmin Zubair
Solicitor