MEES – Minimum Standards of Energy in Private Rented Accommodation
Did you know that from the 1st April 2018 the law changed which prevents new Assured Shorthold Tenancies from being granted if the energy performance certificate rating is an F or G. This could affect up to 300k homes in the UK reported to fall into this energy performance category, approximately 6% of privately rented market.
Letting agents and landlords are being advised to check their rating before granting any new tenancy, as failure to check could result in a fine of up to £4,000 and even being banned from letting their property out. It is worth stating that all existing tenancies will need to be compliant by the 1st April 2020 or they will face similar action and Landlords could be prevented from gaining possession of the property via Section 21 notices if there is no valid EPC in place.
How does this effect the block management industry? Firstly, the improvements could be within the leaseholder’s own demise, such as upgrading of windows, a new boiler, etc. However, it can have some serious consequences to leaseholders especially in older or listed buildings, where improvements that need to be made are part of the communal responsibilities for a freeholder or management company.
This could be particularly tricky if the lease does not allow for improvements to be paid for by the service charge funds, in that case where does the responsibility lay in terms of work and who pays it?
The answer is that if the work is minor, such as loft insulation in a communal loft of a small block and all leaseholders are content to agree for the works to be carried out, it could be resolved easily. A problem could occur if the block is larger and the improvement works required to reach a minimum energy performance of E would cost the leaseholders more and if the ratio of owner occupiers to renters is higher, you may struggle to obtain the unanimous consent for various reasons. In that case you may find that you are unable to rent your property out, which could have a serious impact on the value of the property if you bought it as a Buy-To-Let investment.
What is the solution? Talk to your freeholder and management company directors now, explain what work is required and see if any other leaseholders also share the same problem and open the dialogue to see what options you have based on your lease, likely costs and the willingness of your fellow leaseholders to contribute.
To check out what EPC rating you have, if you’ve ever had one undertaken, can be found here: www.EPCregister.com
If you live in one of our blocks, contact your property manager today and we’ll work together to see what can be done.
Benjamin Hume Ba(Hons) MARLA MIRPM AssocRICS – Managing Director, Evolve Block & Estate Management Ltd.