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Hot Topic Highlight – How to Advise Clients on Increased MEES Targets

Updated: Oct 28, 2023



Building a Better You


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What is today's blog about?


In this week’s blog, we look at the proposed increase in targets under the Minimum Energy Efficiency Standard (MEES) and how you can recommend that clients achieve these.


Essential reading for all RICS APC and AssocRICS candidates in relation to the mandatory Sustainability competency.


What is MEES?


Under MEES, from 1 April 2018 it has been illegal to grant a new lease, lease renewal or lease extension of a property with an EPC rating of F or G.


From 1 April 2020, existing leases of residential properties became unlawful for properties with an EPC rating of F or G.


How will MEES be tightened?


From 1 April 2023, the above will apply to existing leases of commercial properties.


There are specific exemptions from compliance with MEES. You can read the full list and in-depth detail on the Government website.


The Government are looking at further increasing the targets under MEES, following the Energy White Paper published in December 2020. This proposes to increase the minimum EPC rating to B by 2030, with potential transitional steps to D in 2025 and C in 2027.


How can I best advise clients who own properties which might fall within the scope of MEES?


There are a number of key steps to advising clients who own properties, or are considering acquiring properties, which might fall within the tightened scope of MEES:

  1. Audit the existing portfolio and apply a Red Amber Green (RAG) analysis to prioritise high risk properties, i.e., where EPC ratings are C or below.

  2. Ensure existing EPCs are accurate and up-to-date to provide a baseline performance measure (see 4 for action to take following this step!).

  3. Consider other factors other than just the EPC rating, e.g., imminent lease expiries, proposed works, tenant’s improvements or EPC expiries.

  4. Obtain specialist advice from an energy assessor to undertake new EPCs in draft form only.

  5. Ensure that the energy assessor provides in-depth guidance on potential improvements, rather than just relying on the EPC recommendation report. Cost benefit analysis can then be undertaken on the proposed measures to ensure that they have an adequate payback and fit within the wider strategy for the property or portfolio.

  6. Consider how any proposed works will be financed, e.g., is a tenant contracted to contribute a proportion under their lease or is market finance available for specific improvement measures.

  7. Instruct the works in good time and seek to minimise disruption to operations or tenant’s trade.

  8. Take advice from an accountant on the tax liability and potential to write off expenditure on improvements as capital allowances.


How can we help?

Stay tuned for our next blog post to help build a better you.


N.b. Nothing in this article constitutes legal, professional or financial advice.


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