MEES legislation could impact on landlords’ new tenancy agreements

EW legislation is on the horizon which could have a major effect on property owners and managing agents and their installation of energy efficiency improvements.

Under the Minimum Energy Efficiency Standards (MEES), due to come into force from April 2018,  commercial properties will not be able to sign new tenancy agreements unless they reach a minimum EPC rating of E.

It has been estimated these rules will affect a fifth of non-domestic buildings falling under the scope of MEES.

The Government recently published a comprehensive guidance document outlining a number of rules under the legislation, including a seven-year payback test to determine possible exemptions from the regulations.

Raja Khan, Commercial Director at Inteb Managed Services, said: “Until now, little guidance has been available and the timeline for its enforcement is looming.

“However, Inteb is at the forefront of being able to advise on what strategy to take to interpret this legislation so that property owners and managing agents can take action before it impacts on their ability to let and sell properties.”

The new MEES regulations, which will be implemented by the Department of Business, Energy and Industrial Strategy, require landlords of properties rated at EPC F or G to improve the property to at least an E, or register an exemption should one apply, when the tenancy is being renewed or extended, or a new tenancy is being granted.

The seven-year test

One of the main exemptions available is through the seven-year payback test when the installation of energy efficiency improvements will only be required where the recommended measure, or a package of measures, achieves an energy efficiency payback of seven years or less.

This is decided when the expected value of savings on energy bills resulting from the improvements over a period of seven years, are equivalent to, or greater than, the cost of repaying it.

If the energy savings are shown to be less than the calculated cost of repayment, the measures will not meet the payback test and will therefore not be deemed suitable under the regulations. Otherwise, the measures will have met the test and will need to be installed.

Where a landlord is intending to rely on an exemption because a recommended measure does not meet the seven year payback test, they will be required to provide evidence of the capital plus installation cost in the form of three separate quotes.

It is thought this rule will not affect the majority of measures available under the scheme, with lighting retrofit programmes and installation of building control systems and optimisation of control settings often being delivered well within this timeframe.

It is more likely to affect higher capital cost measures, such as replacing plants to more energy efficient alternatives. However, these are not likely to be a sought-after solution for those landlords with buildings under the MEES threshold.

Further exemptions

Another exemption is in place for landlords that have made all the relevant energy efficiency improvements that can be made to the property and the property’s energy performance remains below an EPC E.

This allows a five-year exemption after which the landlord must try again to improve the property’s EPC rating to meet the minimum level of energy efficiency.

A five-year immunity will also be granted if it can be proven, via a report from an independent RICS registered surveyor, that the installation of specific energy efficiency measures would reduce the market value of the property, or the building it forms part of, by more than 5 per cent.

Further immunities include properties where consent from a relevant third party or from a tenant is not granted, if a person becomes a landlord suddenly or if a property is not required to have an EPC rating.

However, if a property does not fall under any of these exemptions and meets the seven-year payback period, the landlord must carry out the work to improve the energy efficiency to at least an EPC rating of E.

Enforcement and penalties

MEES will be enforced by local weights and measures authorities (LWMAs), who may serve compliance notices if they believe a landlord is in breach of the regulations. Failure to provide documents or information requested by a compliance notice, or failure to register information on the PRS Exemptions Register as required by a compliance notice, may result in a penalty notice being served.

If it is proven that a landlord has been in breach for less than three months, a financial penalty of up to £5,000, or of up to 10 per cent of the rateable value of the property – whichever is greater – can be given, subject to a maximum financial penalty of £50,000.

For three months or more, this rises to £10,000 or 20 per cent of the rateable value of the property up to a maximum of £150,000.

Other fines of £5,000 can be applied if a landlord is found to have published false or misleading information on the PRS Exemptions Register or if the landlord has failed to comply with a compliance notice.

If a landlord does not pay a financial penalty imposed, the enforcement authority may take the landlord to court to recover the money.

Finally, LWMAs will also be able to publish some details of the landlord’s breach on a publicly accessible part of the PRS Exemptions Register, which will be available for view by the public for at least 12 months.

The publication of the 71-page document has been long-awaited by industry, which has been preparing for the introduction of MEES on 1 April 2018 for years.

John Alker, campaign and policy director for the UK Green Building Council, said: “We warmly welcome the publication of guidance for minimum energy efficiency standards. The regulations have already had a galvanising effect on the commercial property industry, which has been working hard for the last few years to prepare for these regulations.

“This guidance provides vital clarity to commercial landlords about compliance and enforcement ahead of the regulations coming into force next April.”

Safety Alert: Bosch and Neff gas hobs

A safety alert has been issued to provide guidance to Gas Safe registered businesses and engineers following a safety concern relating to two models of Bosch and Neff gas hobs.

The risk, according to the manufacturer, concerns a faulty gas connector affecting two built-in models manufactured between 2009 and 2011 and sold in the United Kingdom and the Republic of Ireland.

Product details

Product Product code Production period
Bosch built-in gas hob (knobs on the right side) NGU4151DB 2009-2011
Bosch built-in gas hob (knobs on the right side) T20S31N0 2009-2011

Manufacturer BSH Home Appliance Ltd (BSH) has initiated this precautionary measure as, during comprehensive product monitoring and detailed research, it identified a potential issue regarding the gas connectors. In particular circumstances, the gas connector can crack or break which could result in an escape of gas.

What to do if you own, use or service one of these boilers

BSH is offering every owner of an affected appliance a free replacement gas connector by an authorised service engineer at the owner’s home or premises. Any customers, gas users or registered businesses who have concerns with regards their Bosch or Neff gas hob should check whether their appliance is affected by this safety campaign.

How to check whether your appliance is affected

Note down the model number (E-Nr) and batch number (FD) on the rating plate on your appliance or original user manual.

Then check on whether your model is affected. If further assistance is required, then a helpline number has been provided.

What to do if your appliance is affected

To avoid any potential risk until the gas connector has been replaced, owners of an affected appliance should turn off the gas supply to the appliance and no longer use it. If a customer is unsure how to turn off the gas supply to their hob, then guidance should be sought from a suitably qualified Gas Safe registered business.

Where a Gas Safe registered business/engineer encounters one of the affected gas hobs, the current Gas Industry Unsafe Situations Procedure (GIUSP) should be implemented and the appropriate actions and warning notices/labels completed and issued.
The GIUSP (TB 001) can be viewed in the Technical Information section of your online account.

Who to contact if you have any concerns about your appliance

Any customers, gas users or registered businesses who have concerns with regards to their BSH hob can contact BSH by telephone 0800 0287 260.

More people to receive help to stay warm in their homes thanks to new energy reforms

Homes across the UK will get extra support to keep warm during the colder months thanks to reforms published today. Changes to the Energy Company Obligation (ECO) will make sure energy companies provide necessary support to people struggling to meet their heating bills. Plans to extend the scheme from April 2017 to September 2018 were also published today.

The reforms which were consulted on last year will usher in a simplified scheme, with energy companies required to provide struggling households with free energy efficiency measures to make their homes warmer and bring their bills down.

View the full story on the government website here.

Important Gas Safety Alert issued

This just in from the Gas Safety Register:

This Safety Alert (SA) has been published to provide guidance to Gas Safe Registered businesses/engineers about a product safety concern relating to seven Viessmann Vitodens 100 – W system boilers.

Gas Safe Register has been advised by the manufacturer of a risk resulting from a potential faulty seal in the gas valve affecting seven boilers known to be in the UK.

Viessmann Ltd has identified a very limited batch of Vitodens 100-W system boilers that may have a potential issue with the gas valve. Only seven boilers are affected. It has been identified that over time, there is a potential for the seal to deteriorate and for gas to leak through the gas valve. This is a supplier issue that has been contained, with the exception of a small number of boilers that have entered UK distribution channels and which Viessmann has been unable to trace. If the boilers have been installed, the installations will have taken place in 2016.

Further information including affected models is available here.

Next steps for network innovation

An interesting post from our friends at

Ofgem’s Jonathan Brearley discusses the outcomes of the regulator’s recent review of innovation funding and its application.

Some of you will remember the landmark moment on May 10 this year when for the first time in well over 100 years, no coal was used to generate electricity in GB for several hours.

Coal generation during that month was displaced by renewables (especially solar) and other cleaner generation. It shows how far GB has progressed with encouraging renewable energy, but it also highlights one of the big issues we have to tackle to move to a lower carbon economy.

Read the full story here

Heat network metering and billing regulations: compliance and guidance

The Heat Network (Metering and Billing) Regulations 2014 implement the requirements in the Energy Efficiency Directive with respect to the supply of distributed heat, cooling and hot water.

The Energy Efficiency Directive promotes energy efficiency in the EU by laying down rules to overcome challenges in the supply and use of energy.

View full details here.

Government prepares multi-billion pound housing stimulus

The government is readying a post-Brexit vote housing package that will provide billions of pounds to residential developers in an attempt to abate the housing crisis and stimulate the flagging economy.

It is understood that the new multi-billion pound fund, administered through the Homes and Communities Agency (HCA), will back developers from all parts of the industry, including the private rented sector (PRS).

Small and medium-sized enterprises (SMEs) will be in pole position to receive the money, which will be made available in the form of loans, as will developers using modular construction to build out schemes.

Read the full story here.