The Minimum Energy Efficiency Standards : Energy Performance Certificates, carrying out energy efficiency improvements and the impact on dilapidations

Abstract

The Minimum Energy Efficiency Standards (MEES) set out minimum energy standards for rented property. Those standards are expressed in the form of an Energy Performance Certificate (EPC) rating, so securing a good EPC rating is critical, as poorly performing buildings will become unlettable. It is vital that the EPC truly reflects the building’s construction and services, rather than relying on inaccurate assumptions, which will often return a poorer EPC. Also, the EPC’s Recommendations Report should steer away from an automatically generated list of energy efficiency measures (which may well be completely irrelevant to the building), towards a listing specific to the building and its location. Key to MEES compliance in a building with a poor EPC rating is taking the time to properly assess a number of energy improvement measures to find cost-effective improvements that deliver the required improvement in EPC rating. Careful analysis of various options can reveal that some ‘easy fixes’, such as upgrading lighting or an air-conditioning system, may not deliver enough of an improvement over existing installations, or they may be prohibitively costly, negating any savings overall. Exactly who pays for such energy efficiency improvements is a complex, multifaceted dilapidations question encompassing issues such as repair, statutory compliance, reinstatement/alterations, damages/supersession and loss of rent. Depending on the circumstances, the costs associated with energy improvements are more likely to rest with the landlord — at least currently. The situation is fluid, however, as future leases may well be drafted to include provisions relating to energy efficiency improvements.