By Martin Williamson, head of residential property at Latimer Hinks Solicitors

TIME is running out for landlords who haven’t yet considered the long-term energy efficiency of their properties. If they miss the deadline in April 2018, they may be unable to let some of their portfolio, while penalties of up to £150,000 exist for those who breach the new regulations.

In just over a year the new Minimum Energy Efficiency Standards (MEES) regulations come into effect, and landlords should really be preparing for the change now before it’s too late.

Under the new regulations, private sector landlords of properties will not be able to grant new leases on properties to new or existing tenants without an Energy Performance Certificate (EPC) band rating of E or above.

It’s important to note that there will be virtually no exceptions.

The first EPCs, carried out in 2008, last for ten years, meaning those properties will be due for renewal next year. The worry is that landlords might assume the changes won’t affect them as they were originally issued with a band rating of E or above.

It’s not unreasonable to think that the renewed EPC rating will be the same, as long as no negative alterations have been done to the building – and this might well be the case – but properties with original band ratings of D or E (accounting for almost half of all rented properties), are at risk as the building regulations on efficiency have become more rigorous since 2008.

Some more prudent landlords are already having energy assessments carried out, and are making the recommended improvements to the energy efficiency of their properties. This way they are proactively dealing with the issue and avoiding difficulties once the changes come into effect.

There are also landlords that use clauses in their lease contracts stating tenants cannot do anything to the property that could reduce the EPC rating. The thinking behind this is that they could potentially recover costs via a service charge.

This won’t be the case, as the regulations do not impose responsibility on landlords to improve the energy efficiency of buildings; the regulations simply prohibit certain properties being let if they do not meet the criteria.

In February this year the Government published guidelines that reinforced its commitment to MEES and improved energy efficiency across the UK. The penalty for breaching the regulations has been set at a maximum of £150,000, depending on rateable value of the property, and that will remain the same post-Brexit.

The important thing for landlords is to be prepared for when the changes come into effect.

If a landlord is unable to let their property because the band rating is too low, it may take months to rectify because of the need to make large-scale alterations or even additions to the property. This would mean that income from the property would be lost.

The part of the regulation taking effect after April 2023 will apply to existing lettings, too. From that point on, any new or existing letting of a building with an EPC banding of F or G will be in breach of the regulations, with very few exceptions.

Landlords that are unsure if the new regulations will affect them should contact their solicitor for further advice.

Please note: This article is intended as guidance only and does not constitute advice, financial or otherwise. No responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by Latimer Hinks.