The Minimum Energy Efficiency Standard (MEES) was introduced in March 2015 by the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015. The MEES Regulations will come into force as of 1st April 2018.
At present commercial buildings have an energy efficiency rating between A and G. Under the MEES Regulations, as of 1st April 2018 it will be unlawful for a landlord to renew an existing tenancy or grant a new tenancy of a property with an EPC rating of below an E rating unless an exemption is registered.
Does this prohibition apply to all leases? In particular, will landlords who grant long leases need to comply with the MEES Regulations?
If a non-domestic property is let on a tenancy which is granted for a term of 99 years or more than the MEES Regulations do not apply. This means that the letting of the property will not be unlawful on or after 1st April this year, even if the property is sub-standard with an EPC rating of below an E.
However it is important to note that any sub-letting of such of a lease where the sub-lease is for a term of less than 99 years will fall within the scope of the MEES Regulations.
Therefore if a Landlord granted a lease for a term of 99 years on 2nd April 2018 for an F-rated property, the MEES Regulations would not apply to this letting. The landlord would not be doing anything unlawful in granting this tenancy. However, if the tenant then wanted to grant a sub-lease of that property, the tenant (as landlord under the sub-lease) would need to comply with the MEES Regulations as this letting would fall within the scope of them. The tenant would either need to bring the property up to an E rating by carrying out energy efficient improvement works, or show and register a valid exemption.
For any advice call our Specialist Team on 0800 088 6004.