What is it?

From April 2018, it will be unlawful to grant a new tenancy of premises with an EPC rating of below E, unless an exemption applies. For commercial properties, this prohibition will be extended to existing tenancies from April 2023.

What does it mean in practice?

If a landlord lets a commercial property in breach of the regulations, it will not affect the validity or enforceability of the tenancy. However, the landlord may be liable to pay a fine.

  • For a breach of less than 3 months – the greater of £5,000 and rateable value, subject to a maximum of £50,000 plus the publication penalty (the publication on the register of the landlord and details of the breach, for a minimum of 12 months); and
  • For a breach of more than 3 months - the greater of £10,000 and 20% of rateable value, subject to a maximum of £150,000 plus the publication penalty.

Affected property types: Most commercial lettings such as large industrial warehouses (with air conditioning or temperature control), leisure centres, offices, restaurants and retail outlets.

Why do landlords need to consider MEES now?

  • The EPC rating will have an impact on property value and may affect a lenders decision to finance
  • Breaching MEES could be costly (financially and reputationally)
  • Carrying out works could infringe tenant's rights and may result in a hefty bill

However, there are a number of situations in which MEES do not apply, along with exemptions whereby landlords can still let premises despite the low EPC rating.

Whilst the information above relates solely to commercial properties, MEES regulations may also apply to domestic properties. For more information on this and on MEES in general, please visit our dedicated webpage www.tltsolicitors.com/MEES where you can also find information on the events and training we offer on the topic.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.