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From 01st April 2018, a new legal standard the Minimum Energy Efficiency Standards (MEES) come into force.
The requirements for minimum energy efficiency will apply to all rented commercial buildings and poses a threats and also opportunity for landlords, investors, developers and lenders. We envisage that this will have a marked impact on the property sector.
Why is energy efficiency an issue for commercial landlords?
The new rules originate from the Energy Act 2011 and mean that from 01 April 2018, landlords of buildings within the scope of the MEES Regulations must not renew existing tenancies or grant new tenancies if the building has less than the minimum EPC rating of E (unless the landlord has registered an exemption). This first stage of implementation could be considered as the transitional period. However from 01 April 2023, landlords must not let or continue to let any buildings which have an EPC rating of less than E (unless the landlord has registered an exemption) it is unlawful to continue to lease the premises.
Commercial landlords therefore need to consider their property portfolios, review any existing Energy Performance Certificate (EPCs) that they hold and where necessary take steps to assess and improve on the EPC ratings of their properties.
Which buildings are captured?
To establish is if a building and tenancy are caught within the scope of MEES is not straightforward. MEES does not apply to:
Much like the controversial Home Information Packs of the early 2000s which had two conflicting sets of legislation governing its application, the interaction of the relevant regulations for MEES is complex and creates some potential loopholes which no doubt some will look to exploit.
To determine whether a building and tenancy are within the scope of MEES you are required to look at multiple sets of regulations: Energy Performance of Buildings (England and Wales) 2012 and the MEES Regulations themselves.
What are the exemptions?
The exemptions are set out in the Energy Efficiency (Private Rent Property) (England and Wales) Regulations 2015. The key exemptions are as follows:-
What can we do to help you?
Whether landlord or tenant we can review your existing standard lease. Are the lease provisions effective and enforceable? We will protect you and your property interests. Going forward our leases will include the following provisions:
Should you be have any queries regarding your existing or any future premises that you are interested in, then please contact our Team of Specialist Solicitors. Please call Ian Bowker or Peter Wilson at Terry Jones Solicitors, Telford on 01952 297979 or by email to: firstname.lastname@example.org.
DISCLAIMER: The content of this update is for reference purposes only and does not constitute legal advice.
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