Property To Let, London.

Tougher regulations for letting energy-inefficient private residential homes have been introduced by the government.  From 1 April 2020 it is illegal for landlords to let properties which do not have an energy efficiency rating of ‘E’ or above.

The Minimum Energy Efficiency Standard (MEES) regulations were first introduced in 2018.  These banned landlords from granting new or renewed tenancies for energy-inefficient properties.  Now landlords are required to upgrade all their properties which do not meet the energy efficiency rating of ‘E’, whether or not a new tenancy is granted.

Landlords who fail to meet the regulation may be publicly named and shamed and can be fined up to £5,000 per property.

The government allows various exceptions to the regulations.  Landlords hoping to take advantage of these must register online on the PRS Exemptions Register.  These include the ‘high cost’ exemption where the cost of making improvements would exceed £3,500 and the ‘all relevant improvements made’ exemption, where a property does not meet the required standard even after all the energy efficiency improvements have been made.  A full list of the exemptions has been published on the government’s website, and further guidance can be found here.

Property managers will need to make sure that they advise all their relevant clients about the new regulations,” said James Burgoyne, Director – Claims & Technical, Brunel Professions. “They may expose themselves to complaints, or even claims of professional negligence, if they allow landlords to let private residential properties which do not meet the standards. It should be noted that the maximum penalty under MEES is currently £5,000 per property. This will be within the professional indemnity insurance excess for many firms, so it would be a cost which they would not be able to transfer to the insurer. It would only take a few cases for the aggregate of such penalties to be a sizeable financial drain on a firm. As such, property managers will want to ensure that they are on top of this exposure.

There are plans to extend the MEES regime to existing commercial tenancies from 01 April 2023.

Reports about the new regulations have been published by Eversheds Sutherland and ARLA.

Brunel provides a wide range of Professional Indemnity Insurance broking services to property professionals.  Click here to find out more, or call Mark Sommariva on 0203 475 3275.