What is Minimum Energy Performance Standards (MEPS)?
Minimum Energy Performance Standards (MEPS), is a legal compliance under the Energy Act 2011, for properties rented out in the private rented sector. The legislation states that it is unlawful to let a residential or commercial property with an EPC rating of F or G. If this is the case, the properties will have to install improvements to meet the minimum standards.
Are there any exemptions to MEPS?
Landlords can be exempt from MEPS if they can demonstrate one of the following:
- All cost – effective energy efficiency improvements have been carried out, either within a seven-year payback or under the Green Deal’s “Golden Rule”
- Consent from a third party is refused; such as a local authority
- A qualified expert provides written advice that improvements would devalue the property by 5% or improvements on the property would cause damage to the property
Exemptions from MEPS must be registered on the central government PRS Exemptions Register and are valid for 5 years only.
What are the threats of MEPS legislation?
Landlords:
- Financial cost of improving the property
- Loss of earnings due to the property not being rented out.
Freehold Investors:
- The reduction in value of any property asset that does not meet the regulation standards.
- Tough to find a new tenant landlord willing to sub-let a property that needs improvements
Developers:
- Timetables of future development programme’s being changed
What are the benefits of MEPS legislation?
Landlords:
- The market value of the property increasing
- The rental agreement increasing
Freehold Investors:
- Having energy improvements to the property paid for by the landlord tenant, for those freehold investors that have one in place
Developers:
- Reduction of property asset costs, for those assets that are below the minimum standard
Are there any fines?
There are fines in place for landlords that rent out properties that do not meet the regulations. The fine depends on the length of time the property is rented in breach of MEPS.
- Less than 3 months: Equivalent to 10% of the property’s rateable value: Minimum £5,000 – Maximum £50,000
- More than 3 months: Equivalent to 20% of the properties relatable value: Minimum £10,000 – Maximum £150,000
What should companies do?
- Carry out an energy assessment to check their EPC rating
- Aim for a rating of D to ensure they comply with future legislations
Why should companies comply to MEPS?
The market value of properties can be affected by the cost of energy and mandatory energy efficiency improvements. Therefore, this will affect the buying decisions of potential buyers and clients. However, if clients did comply with the legislation the market value of the property will be maintained, there will be reduced running costs of the property and reduced CO2 emissions across the UK.
How can Compliance365 help?
Compliance365 can help companies meet minimum energy performance standards as we provide help and advice with legal compliances to our clients. We can also provide advice on how our clients can reduce their energy emissions, through energy saving solutions. If you would like to read more information on MEPS please visit our page at http://compliance365.co.uk/legal-compliance/minimum-energy-performance-standards-meps/
You can also get in contact with us through email at sales@compliance365.co.uk or call 01924 669940 to speak to one of our advisors.