MEES in Action
MEES in Action12/3/2019
After the eighteen months of Minimum Energy Efficiency Standards (MEES) implementation, we’ve found the end of the world is not nigh! With some practical advice and limited expense, our clients have dealt with inadequate Energy Performance Certificate (EPC) ratings on their properties.
Lettings are now in hand and the new tenants will benefit from energy savings.
The implementation of MEES created some concerns and deliberation in the property industry. It was thought that some owners may be left with unlettable buildings, or major expenses for upgrading their premises. From 1st April this year, the MEES rules have meant that it is not generally legal to let commercial properties with an EPC rating less than A-E. It seemed much older stock, or other inefficient buildings, would stand empty unless improvements were made. This may not be the case.
We dealt with a 2,800 sq ft industrial unit in central London, where a Lease Expiry was under discussion. Our provisional advice showed an EPC Rating of F. As there was no valid Certificate on the property, the MEES rules did not apply and we would have been free to complete the Lease Renewal. However, there was some initial fear that major investment would be required if the tenant left. This may have had an impact on the negotiating position of the Landlord – seeking a more modest rent to ensure the existing tenant renewed. However, our advice indicated that limited improvements to lighting could be made to upgrade energy efficiency and a conservative approach was not necessary. For business reasons, the tenant has chosen to vacate and with their co-operation, limited upgrading works have been carried out on behalf of the Landlord. At a cost of only £325 the EPC Rating was increased to Band E and a re-letting is now in hand.
An office unit in Hertfordshire had an historic EPC Rating of F. Improvements have been carried out to lighting to gain a new EPC Rating of D and we let the property to a new business.
There is a school of thought that the MEES rules may change in the future to set the bar a little higher by requiring a Band D rating for new lettings. The work on the Barnet office has future proofed the property in this respect. If a Band D rating is required for the industrial unit we anticipate that only limited further expenditure will be required.
In 2023 all lettings and renewals will need to be MEES compliant. We are building strategies to accommodate this change.
For further practical guidance on asset management and MEES, please email email@example.com and we can endeavour to assist.