What is the “cost cap” for domestic MEES? When are improvements “too expensive”?

Originally, the idea was that improvements would only have to be made to domestic properties if they could be achieved “at no cost” to the landlord. This policy depended upon various forms of funding being available to landlords to make any necessary improvements.

Following the effective collapse of Green Deal funding and the withdrawal of many grants, the Government launched a consultation in December 2017 to review this policy.  This occurred just before the Energy Efficiency (Private Rented Sector) (England and Wales) Regulations 2015 began to take effect in April 2018 therefore little actual evidence was available about their real impact.

The consultation ran until March 2018 with summary responses being published in July 2018 before the Government responded with new policy in November 2018.  The new policy effectively requires landlords to spend up to £3500 inclusive of VAT (the cost cap) per property after October 2017 in order to bring it up to the Minimum Energy Efficiency Standard (MEES).

A full response is available online:

The summary states that, subject to timely Parliamentary approval, the Government intends to amend the regulations and implement them during 2019 as follows:

  1. Introduce a landlord financial contribution amendment with the landlord contribution capped at £3,500 and inclusive of VAT;
  2. Any investment in energy efficiency made since October 2017 to be counted within the cap;
  3. Any available third-party funding, including Green Deal finance and local authority grant funding, to be counted within the cap;
  4. Establish a new ‘high cost’ exemption to be available where a substandard property cannot be improved to E for £3,500 or less, and require the submission of three installer quotes where a landlord is registering such a ‘high cost’ exemption;
  5. Remove the current ‘no cost to the landlord’ provision, and curtail existing ‘no cost’ exemptions so that they will end on a planned date of April 2020;
  6. Remove the consent exemption currently available under Regulation 31(1)(a)(ii) where a tenant has withheld consent to a Green Deal finance plan;
  7. Upon enactment, the amended regulations will apply upon the granting of:
    1. a new tenancy to a new tenant, and,
    2. a new tenancy to an existing tenant.
  8. From 2020, the amended regulations will apply to all privately rented property in scope of the regulations, in line with the existing regulatory ‘backstop’ date.

Can your floor plans be used as Lease Plans?

Lease plans have to take a specific format and include specific information to meet the requirements of the Land Registry.  Floor plans are intended for use in marketing a property for sale or rent and, as such, are not suitable for use as a lease plan.

However, we have access to specialists in our team who are able to produce lease plans that meet the requirements of the Land Registry.  We do not have a great demand for this service but are able to offer it on request.  Please contact our team for more information including the information required and prices.

What are the ESOS Enforcement Penalties?

The penalties for failing to comply with the Energy Savings Opportunity Scheme (ESOS) are designed to encourage compliance as soon as possible.  As such, they tend to include a fixed penalty with additional penalties applied daily until compliance is achieved.

Failure to notify the Scheme Administrator:

Failure to notify the Environment Agency of compliance by the required date and/or failure to provide basic details as part of the notification may result in some or all of the penalties below:

  1. A fixed penalty of up to £5,000;
  2. An additional £500 penalty each day starting from the day after the published Compliance Date until compliance is achieved, subject to a maximum of 80 days; and / or
  3. Publication of the details of the non-compliance.

Failure to maintain adequate records to demonstrate compliance:

Failure to maintain adequate records may result in some or all of the penalties below:

  1. A fixed penalty of up to £5,000;
  2. An additional charge to cover the cost to the compliance body for undertaking sufficient auditing activity to confirm that the organisation has complied with ESOS; and / or
  3. Publication of the details of the non-compliance.

Failure to undertake an ESOS Assessment:

Failure to undertake a valid ESOS assessment (including failure to use sufficient data or to appoint a Lead Assessor etc) may result in some or all of the penalties below:

  1. A requirement to conduct a valid ESOS Assessment by a date specified by the compliance body;
  2. A fixed penalty of up to £50,000;
  3. An additional £500 penalty each day starting from the day after the published Compliance Date until compliance is achieved, subject to a maximum of 80 days; and / or
  4. Publication of the details of the non-compliance.

Failure to comply with an enforcement, compliance or penalty notice:

Failure to comply with an enforcement, compliance or penalty notice may result in some or all of the further penalties below in addition to any previous penalty:

  1. A fixed penalty of up to £5,000;
  2. An additional £500 penalty each day starting from the day after the notified Compliance Date until compliance is achieved, subject to a maximum of 80 days; and / or
  3. Publication of the details of the non-compliance.

What is a “Public Body”? Is my charity/community group a public body?

The Energy Savings Opportunity Scheme Regulations 2014 define a public body as those bodies which must adhere to the UK public contract regulations.  This definition also ensures organisations should not be simultaneously subject to both mandatory Display Energy Certificates and Energy Savings Opportunities Scheme (ESOS) assessments.

The Public Contract Regulations 2015 state:

“contracting authorities” means the State, regional or local authorities, bodies governed by public law or associations formed by one or more such authorities or one or more such bodies governed by public law, and includes central government authorities, but does not include Her Majesty in her private capacity;

“bodies governed by public law” means bodies that have all of the following characteristics:—
(a)they are established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character;
(b)they have legal personality; and
(c)they have any of the following characteristics:—

(i)they are financed, for the most part, by the State, regional or local authorities, or by other bodies governed by public law;
(ii)they are subject to management supervision by those authorities or bodies; or
(iii)they have an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law;

Scotland has additional public contracts regulations applying to organisations in Scotland.  These may include additional organisations not included in England and Wales.

Public Body – Self Determination Questionnaire

If, as an organisation, you are unsure as to whether or not you are a “public body” you should seek you own legal advice.  When considering if your not-for-profit or charity is subject to these regulations the key will normally be in deciding if you are a body “governed by public law”.  The following steps may help your trustees/directors to decide:

  1. Are you listed in Schedule 1 of The Public Contracts Regulations 2015 (click to view) or Schedule 1 of The Freedom of Information Act 2000 (click to view), covered by The Public Contracts (Scotland) Regulations 2015 (click to view) as amended, a regional authority or a local authority (county, borough, district, town, parish councils etc.)?  If your organisation is one of these then you are a “public body” and will require DECs on the premises you occupy if the floor area and public visitation requirements are also met and you will not be subject to ESOS.  If you are not listed you should continue to step 2.
  2. Do you have a legal personality for the purposes of the regulations?  In effect, are you a legal body other than an individual?  Typical examples could include limited companies (including charitable companies), limited liability partnerships (LLP), community interest companies (CIC), charitable incorporated organisations (CIO), co-operative societies (Co-op), community benefit societies (BenCom) and financial mutuals.  If your organisation is any of these you may be a “public body” and should continue to step 3.  If not, you probably have no legal personality in this sense.
  3. Is your organisation established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character?  A traditional business exists to make wealth (money) for distribution to its owners, investors and shareholders.  In other words, it has industrial or commercial character and would not be considered a “public body” hence you may be subject to ESOS.  In contrast, public bodies in this sense exist to meet the general needs of society or of communities.  They often provide services like health, social care, education, child care and recreation etc on a not-for-profit basis.  They typically use any profits they make from business activities to reinvest in the provision of these services.  They may also have a legal “asset lock” preventing the distribution of any profits or assets to members or shareholders.  If this applies you should continue to step 4.
  4. Does the majority of your finance come from the State, regional or local authorities or other bodies governed by public law?  If the majority of your organisation’s funding comes from the government, regional authorities, local councils or other public bodies (likely to include grants from charities etc) then you are a “public body” and will be subject to Display Energy Certificates not ESOS.  If not, continue to step 5.
  5. Are you subject to management supervision from the State (including central government departments), regional or local authorities or other bodies governed by public law?  A simple way of determining this is to consider if you are free to run your organisation as you wish or whether you have to account for decisions that are made or actions taken to another organisation.  For example, most organisations receiving public money have to report upon the activities funded directly or indirectly back to the funding organisation, i.e. they are subject to supervision to ensure the money is spent as intended.  Registered Charities are subject to the supervision of the Charity Commission which is part of the State.  Similarly NHS practices are subject to supervision from the Department of Health through NHS Trusts and schools, colleges and academies are subject to supervision by the Department of Education through OfSTED.  If you are subject to management supervision then you are a “public body” and will be subject to Display Energy Certificates not ESOS.  If not, continue to step 6.  [NB: Educational establishments should remember that students are considered to be members of the public under these regulations.]
  6. Do you have an administrative, managerial or supervisory board with more than half its members appointed by the State (including central government departments), regional or local authorities or other bodies governed by public law?  If your organisation does then it is a “public body” and will be subject to Display Energy Certificates not ESOS.  If not, you are probably not a “public body” and so will be subject to the requirements of the Energy Savings Opportunities Scheme (ESOS) if you are a large undertaking on the qualifying date.

How is the building area calculated?

Floor areas for energy assessments are based upon Gross Internal Area (GIA) as defined in the current RICS Code of Measuring Practice.  Further information can be obtained here.

In order to complete a Display Energy Certificate, the GIA of the building must be accurately determined.  The energy assessor is responsible for verifying any value provided and for ensuring that it is accurate.  The default fallback position is that the energy assessor will be required to measure the building to determine the GIA.

However, it is recognised that the buildings requiring DECs are often large and complex.  As such, it is likely that other professionals are involved in building management and a GIA for the building may be available from other means.  This can avoid the lengthy and costly process of the energy assessor measuring the entire building e.g. a large college or acute hospital.  Therefore, DEC assessors are authorised to accept the following sources of information providing they take appropriate sample site measurements to verify the figures used are reasonable.  The acceptable secondary sources are:

  1. Measurements from scaled drawings: – This method can be used where professionally produced scaled plans are available for the building.  It is most useful when measurement layers have been turned on.  Particular care must be taken to ensure that measurements shown are Gross and not Net of internal walls etc.
  2. Areas from a formal Asset Register or similar: – This is often the simplest method where a suitable document exists but the energy assessor must be able to demonstrate that this is a formal document that has been professionally produced.  Documents in electronic format are acceptable.  Particular care must be taken to ensure the figures used are clearly identifiable, accurate, current and Gross not Net.  It is not unusual for these registers not to be updated to reflect building changes or for inaccurate or Net figures to be input in error.
  3. Information from an Architect or Surveyor who has reason to know: – Where an Architect or Surveyor who is registered with an appropriate professional body has undertaken work relating to the building they may have established the GIA.  This value can be used with appropriate supporting evidence.  This is also the justification used to accept a GIA printed on professionally produced scaled drawings of a building.

Uniquely for DEC’s, it is sometimes acceptable to use alternative measures of floor areas for some specific types of building.  However, these exceptions are very limited and the software used to produce the DEC converts these values to GIA before calculating the building rating.  The conversion is very conservative and so the rating will nearly always be considerably worse if these values are used that if the GIA is used directly.  Additionally, the GIA is normally available when a suitable source of these values is provided and so using them is not advisable.

Do I need an Advisory Report completing as well?

Advisory Reports (AR) provide information about the way energy is managed and used within a building.  They provide recommendations for improving energy efficiency which can help reduce energy bills if successfully implemented.  Even where they are not required, it is often beneficial to have the AR for a building completed or updated.  This is particularly true when the energy assessor has to complete a site visit to issue the DEC as the additional work for the assessor is limited and this should be reflected in the assessment price.

In England & Wales, a valid Advisory Report is legally required to be in place before a DEC is issued.  In reality, they are usually both added to the national register at the same time when required but they can be completed separately.  The Advisory Report must be for the same building and occupier as the DEC so they should both be accessible under the same entry on the register.  It is the responsibility of the energy assessor to check the register to ensure that the AR is in place before lodging the DEC.

In Scotland, Advisory Reports are voluntary but will be required if it is intended to use the DEC within the Energy Saving Opportunities Scheme (ESOS).

What is a “Building” for DEC purposes?

For the purposes of Display Energy Certificates, a building must have a roof, walls and use energy to condition the indoor climate.  This is the case where the building has any of the following fixed services:

  • Heating;
  • Cooling; and/or
  • Mechanical ventilation (this means the supply of fresh air and extraction of stale air – not just an extraction fan).

It is not uncommon for a site to have multiple buildings or a large building built is multiple phases.  If two or more buildings on the same site are linked by a fully enclosed structure consisting of a roof and walls, even if the link is not itself conditioned, then the combined buildings can be considered a single building for DEC purposes providing they have not been designed or altered to be used separately (usually by separate occupiers).  This approach is particularly sensible when the different parts are serviced by the same common systems and where sufficient sub-metering is not in place.  However, they may still be treated separately which can be useful in identifying energy efficiency improvements and monitoring energy usage.

NB: Since February 2009 site based DECs and ARs no longer meet the requirements of the legislation.  All qualifying buildings on a site must now have their own Display Energy Certificate and Advisory Report.

I’m a domestic landlord, what do I need to do for MEES?

Complying with the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 and MEES can seem more than a little daunting.  However, the Department for Business, Energy & Industrial Strategy have simplified the process into a single flow chart to help.  Combined with expert advice and support, this chart will help guide landlords through the process required to comply with the regulations.

MEES Process Flow Chart
Source: Page 81, Guidance for landlords and Local Authorities on the minimum level of energy efficiency required to let domestic property under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, BEIS (Oct 2017).

How do I register a MEES exemption on the PRS Exemption Register? What evidence is required?

All exemptions claimed by landlords to improving domestic properties with an EPC rating at F or G must be registered on the PRS Exemptions Register.  This is an online process and does not cost anything to complete but you will need to have the correct supporting evidence available when you make your application.  In addition to registering exemptions, you can also search for details of exemptions that have already been registered.

To access the PRS Exemption Register visit

It is very important that you recognise that a single property may be subject to a number of different exemptions that apply to different improvements.  An exemption from one improvement does not exempt a landlord from making other relevant improvements.

Additionally, you will need to ensure that you have completed the correct processes and gathered sufficient evidence before registering an exemption.  There are significant penalties for registering a false exemption on the PRS Exemptions Register.

The Department for Business, Energy & Industrial Strategy (BEIS) have issued the guidance below regarding the minimum evidence required to support each type of exemption.

Exemptions Register Information Requirements
Information required for all exemptions:
    • The address of the relevant rental property;
    • which exemption to the Regulations the landlord is registering;
  • a copy of a valid Energy Performance Certificate for the property.
Additional Information and Evidence Related to Each Specific Exemption
Registering an exemption under the regulation 25(1)(b) exception – where a recommended measure is not a “relevant energy efficiency improvement” because the cost of purchasing and installing it cannot be wholly financed at no cost to the landlord (see Regulation 24(3)):
    • A description of why the landlord has been unable to obtain adequate ‘no cost’ funding.
  • Optionally, the landlord may also provide a copy of any evidence on which the landlord relies to demonstrate that they have been unable to access relevant ‘no cost’ funding to fully cover the cost of installing the recommended improvement or improvements.  This evidence of a landlords inability to access relevant ‘no cost’ funding may include a notification from a Green Deal provider advising that no Green Deal finance is available for a recommended measure, or that funding is only available to partially cover the costs.

Please Note:  The Government has decided to replace this exemption with a cost cap of £3500 inc VAT.  An implementation date for this is yet to be confirmed by Parliament.

Registering an exemption under the regulation 25(1)(a) exception – where all relevant improvements have been made and the property remains below an E:
    • Details of any energy efficiency improvement recommended for the property in a relevant recommendation report (if separate to the relevant EPC), including a report prepared by a surveyor, or a Green Deal Advice Report;
  • Details, including date of installation, of all recommended energy efficiency improvements which have been made at the property in compliance with the Regulations.
Registering an exemption under the regulation 25(1)(b) exception – where the property is below an E and there are no relevant improvements which can be made:
  • A copy of the relevant report to demonstrate this (if separate to the relevant EPC).
Registering a wall insulation exemption under regulation 24(2):
  • A copy of the written opinion of a relevant expert stating that the property cannot be improved to an EPC E rating because a recommended wall insulation measure would have a negative impact on the property (or the building of which it is a part).
Registering a consent exemption under regulation 31(1):
  • A copy of any correspondence and/or relevant documentation demonstrating that consent for a relevant energy efficiency measure was required and sought, and that this consent was refused, or was granted subject to a condition that the landlord was not reasonably able to comply with.

Please Note:  Where the party who withheld consent was a tenant, the exemption will only remain valid until that tenant’s tenancy ends.  When that tenant leaves the property (or after five years, whichever is soonest) the landlord will need to try again to improve the EPC rating of the property, or register another exemption, if applicable.

Registering a devaluation exemption under regulation 32(1):
  • A copy of the report prepared by an independent RICS surveyor that provides evidence that the installation of relevant measures would devalue the property by more than 5%.
Registering an exemption upon recently becoming a landlord (regulation 33(1) or (3)):
    • The date on which they became the landlord for the property, and
  • the circumstances under which they became the landlord.

Please Note:  Where a person wishes to register an exemption upon recently becoming a landlord, the exemption will last for a period of six months.

Do I need to get my tenant’s consent to make improvements?

There is no specific requirement in the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 for a landlord to seek tenant consent to carry out works.  However, depending on the terms of the tenancy agreement between a particular tenant and landlord, the landlord may need to obtain tenant consent before undertaking certain works (energy efficiency related or otherwise).  Where this requirement already exists, the PRS Regulations recognise that consent should be obtained before work is undertaken.  This is considered entirely compatible with the requirement to allow a tenant quiet enjoyment of the property.

Between April 2018 and April 2020 landlords are only required to improve F or G rated properties before signing a new tenancy agreement. In their guidance the government states that they expect “many landlords will make improvements while a property is vacant between tenancies” and that therefore “tenant consent may not be a consideration”.

The guidance issued goes on to consider this area in more detail.

“One issue which landlords should consider is whether or not they have the right to carry out improvement works under the terms of an existing tenancy. Landlord rights of entry to undertake work on a property typically only extends to the carrying out of repairs or maintenance, rather than making ‘improvements’. As a majority of the measures landlords can install to meet the minimum standard will be considered improvements, a landlord may not have an automatic right of entry to install the measure or measures, and tenant consent may be necessary.

“On the other hand, if the tenancy agreement specifically gives the landlord right of entry to undertake ‘improvement works’, tenant consent may not be necessary. In all cases the wording of individual tenancies will dictate what is and is not permissible without consent.”

Additionally, landlords are reminded that they are under an obligation to make reasonable efforts to obtain third party consents and should not behave in such as manner as would discourage third party consent being granted.

“The Regulations require the landlord to make ‘reasonable efforts’ to obtain third party consent. Reasonable efforts may include attempts on a number of separate occasions and using a number of different available means of communication to secure agreement from, for example, a tenant or superior landlord, with evidence to show this had been done (in the case of planning consent refusal, evidence of a single application and subsequent refusal is likely to be sufficient evidence).

“Broadly speaking, it is thought that that it will not be reasonable for the landlord to comply with a condition which may reduce the landlord’s ability to let the property or if it involves unreasonable costs.”

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