Minimum Energy Efficiency Standards NLA and NIA help landlords meet new regulations

Landlords in England and Wales have less than a year to make sure that any properties they let out have an Energy Performance Certificate (EPC) rating of E or above.

The Minimum Energy Efficiency Standards (MEES), set out under the 2015 Energy Efficiency Regulations, will come into force on 1 April 2018. The rules will make it unlawful to grant new leases on properties with an EPC rating or F or G, rendering them unmarketable.

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Are you ready?

Twelve months may seem like plenty of time to prepare for the upcoming changes; however, a number of industry bodies have recommended that landlords start devising a strategy for conducting energy efficiency improvements as soon as possible.

As a landlord with one or a few domestic properties, now's the time to identify where improvements need to be carried out.

A helping hand

If one – or several – of your properties need upgrading, you'll need to find local insulation installers who can carry out the necessary work, which could prove to be a time-consuming task.

But, there's good news: the National Landlords Association (NLA) is teaming up with the National Insulation Association (NIA) to provide landlords with an easy-to-use online facility, where they will be able to find local installers.

NIA's chief executive, Neil Marshall, said the partnership with the NLA will provide a "timely service" to help private landlords adhere to the new standards. He continued: "Landlords can contact local NIA Installer members via the NLA or NIA websites to arrange a survey and quotation. They can be safe in the knowledge that NIA installers will have met stringent criteria and sign up to the NIA's Code of Professional Practice providing added assurance and recourse."

Richard Lambert, chief executive officer at the NLA, stressed the importance of landlords being able to access local specialists who are reputable and trustworthy, especially when it comes to insulation. "[We] hope that this online service will enable landlords to meet their obligations by making their properties more energy efficient," he concluded.

Commenting on the partnership, minister for energy and industry Jess Norman said it could help tenants to boost the energy efficiency of their homes and, as a result, save money on their heating bills.

Know the rules

As an article on the out-law website outlines, the new rules apply to both commercial and domestic properties with several exceptions, including:

  • The landlord has carried out specific energy efficiency improvements that are deemed cost-effective, meaning they involve no upfront cost because the cost of work satisfies the Green Deal's Golden Rule, or they are cost-effective over a seven-year payback period.

  • The work required to raise the rating to an E would lead to more than a 5% drop in the property's value.

  • It is not possible to obtain third-party consent for the work.

  • Domestic property lettings that are not assured or regulated tenancies are exempt, along with lettings by public landlords including local authorities, housing associations or government departments.

The rules also apply to lease renewals, with the requirements compounded by changes to the Building Regulations that came into effect back in 2014. Under the new laws, properties that have already been EPC evaluated could be given a lower rating if a new EPC is triggered and the property is re-evaluated. An E-rated property could be downgraded to an F rating, meaning that a new lease cannot be granted after April 2018 unless improvements are carried out.

Additionally, requirements coming into force from April 2020 for domestic properties will make it unlawful for landlords to continue letting properties with an EPC rating of E or below unless specific energy efficiency measures have been carried out first, or if the property is exempt. The changes will affect landlords of commercial property from April 2023.

What now?

Landlords need to start considering what steps to take in order to meet MEES and provide their tenants with warmer homes.

It is possible that the minimum E rating will be raised in the future. So, if you have buildings rated F or G, it may be more cost-effective to spend a little more now in order to ensure your properties are rated D or above.

While you're reviewing the energy ratings of your properties, why not get in touch with Stride to find out about our highly-competitive, specialist landlord insurance? As well as landlord buildings and contents insurance, we offer a range of specialist cover, including rent guarantee, legal expenses and tenants' contents insurance. Call us on 0800 840 6699.

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