MEES: the Minimum Energy Efficiency Standards impact on commercial buildings

scoring

The facts about MEES

The MEES (Minimum Energy Efficiency Standard) was first established in March 2015. It appointed a grading from A – G on the efficiency of energy use of a commercial building, with G being the least efficient scoring. As of April 2018, a new legal standard was introduced requiring a rented commercial building to present a minimum scoring of E grade or above. Consequently this ruled out the F and G scoring as acceptable, and therefore landlords are required to ensure compliance before a lease is granted.

Who will this impact

This MEES standard of E grading or above currently applies to all new leases and the renewal of leases. However in April 2023, this will extend to cover all leases, not just new and renewal submissions. If the building is non-compliment it will make the property unrentable, unless exemptions have been approved. Failure to abide by this standard can also create financial penalties, and affect the value of the asset. The penalties range from £5,000 to £150,000, per occasion. However by the landlord having an energy efficient building it can increase the rental and asset value. Stand alone buildings less than 50m² will not be required to meet MEES, as well as short letting that are 6 months or less, and lettings over 99 years or more.

What are the exemptions?

There are a few exemptions that apply. If the energy rating is still below E it could be due to:

The “Golden Rule”: where all energy efficiency improvements have been made to the building where possible, and these improvements will pay for themselves in energy savings within seven years, but it still doesn’t meet standards. An independent assessor will determine this.

Devaluation: If the work to upgrade the building will reduce the value of the property by more than 5%. An independent surveyor will determine this.

Third Party Consent: Where consent to undertake the work has been refused from either a tenant, superior landlord or the Local Authority.

Why the change?

Greenhouse Gas (GHG) emissions are disrupting the carbon reduction targets for 2020 and 2050. The change has been put in place to support these figures and ensure the built environment has minimal impact on these targets. Newer properties meet the current energy efficiency standard through the Building Regulations, and therefore the application of this standard is expected to mostly impact older buildings.

If you would like to further information on this or the impact it could have on your building, please click here