The driving force for commercial property
Ben, at a presentation to ACES’ Eastern Branch, alerted practitioners to the real challenges ahead to meet energy performance standards, and potential costs of doing so, if you are to keep your buildings let: “this is set to prove to be the most significant piece of legislation to affect existing building stock in a generation.” Ben here presents a useful tactical approach to MEES.
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The ‘MEES Regulations’ (1,2) are currently in force for leasehold commercial property in England and Wales to prohibit the letting of commercial properties which do not achieve the current minimum standard of an EPC rating E. Through imminent changes ahead, this is set to prove to be the most significant piece of legislation to affect existing building stock in a generation.
The UK Government has now declared its intention to increase the minimum standard to an EPC rating B by 2030 (3). This is a seismic shift which will require stakeholders substantially to rethink their property strategy for the decade ahead. In this article we seek to identify what is at stake, some of the difficulties faced, and what those facing this challenge could and should be doing next.
Risks – enforcement
Failure to comply with the MEES Regulations can lead to enforcement action from the local authority in question. While instances of enforcement remain low, it remains the case that financial penalties are as follows:
n.b. these penalties apply per instance and not per building – landlords of multi-let properties should be particularly aware of this where aggregate penalties could easily escalate into millions of pounds.
Non-compliance
The principal contraventions under the regulations are as follows:
- Granting a new lease of a ‘sub- standard’ (4) property at any point since 1 April 2018
- Granting a renewal lease of a ‘sub- standard’ property at any point since 1 April 2018
- Granting a lease extension of a ‘sub-standard’ property at any point since 1 April 2018
- Allowing a lease (which has otherwise lawfully been granted) of a ‘sub-standard’ property to continue as of 1 April 2023. It is necessary to expand on this final point, given that it remains a source of significant confusion for many, with incorrect advice still being given by agents, advisers,
solicitors even.
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