The Government amended regulations during the course of 2019 following a consultation process carried out in December 2017, by the Department for Business, Energy and Industrial Strategy (DBEIS) in respect of amendments to The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 for domestic properties. The consultation was to seek views on imposing a cost cap on landlords whose premises are sub-standard (i.e. with an energy rating of below E).
Where a landlord proposes to let sub-standard domestic premises on a letting which is caught by the MEES Regulations, the landlord is able to register an exemption where it has made all energy efficiency improvements possible for a property (or where there are no relevant energy efficiency improvements than can be made), and still the minimum required energy efficiency standards cannot be reached.
Relevant energy efficiency improvements are those that could be wholly financed “at no cost to the landlord” by means of funding provided by central government, a local authority, or any other person (i.e. usually under a Green Deal).
DBEIS has proposed a “landlord funding contribution” principle. The outcome of the consultation is that a £3,500 cost cap is to be imposed where third-party funding is unavailable or insufficient to cover the costs of energy efficiency improvements. This means that residential landlords would have to spend up to £3,500 (inclusive or VAT) in seeking to improve a building’s energy rating above F. The consultation paper originally proposed a cap of £2,500.