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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 https://prsregister.beis.gov.uk/

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.

Energy Savings Opportunity Scheme (ESOS)

The Energy Savings Opportunity Scheme (ESOS) was established by the UK Goverment to implement Article 8 (4 to 6) of the EU Energy Efficiency Directive (2012/27/EU). The ESOS Regulations 2014 give effect to the scheme.

ESOS is a mandatory energy assessment scheme for organisations in the UK that meet the qualification criteria. The Environment Agency is the UK scheme administrator.  Organisations that qualify for ESOS must carry out an ESOS assessment every 4 years. These assessments are audits of the energy used by their buildings, industrial processes and transport to identify cost-effective energy saving measures they can implement to reduce their energy demand.  The entire audit process must be supervised by an accredited ESOS Lead Assessor.

Organisations must notify the Environment Agency by a set deadline that they have complied with their ESOS obligations. The deadlines for the first and second compliance periods ending in December 2015 and 2019 have now passed for organisations that qualified on 31 December of the previous year.  However, organisations need to start planning now to meet their obligations for the next audit period.

FAQs

FAQ: Energy Savings Opportunity Scheme (ESOS)

ESOS applies to large undertakings in the UK and their corporate groups. It mainly affects businesses but can also apply to not-for-profit bodies and any other non public sector undertakings that are large enough to meet the qualification criteria if they are engaged in any “trade or business activities”.

A large undertaking is, on the phase qualification date:

  1. any organisation which has 250 or more employees; or
  2. any organisation which has fewer than 250 employees, but has an annual turnover exceeding €50 million and a balance sheet exceeding €43 million.

For the purposes of ESOS, the term employees includes employees and other persons engaged in the business of the organisation such as owner-managers and partners.  For a UK registered undertaking, this includes all employees contracted to the undertaking either in the UK or abroad.  For a non-UK registered undertaking with a UK establishment it includes all those contracted to the undertaking who are subject to income tax in the UK.  Please note, this is also the total number of employees regardless of the number of hours worked or contracted (not the number of full-time equivalent staff).

You must take part in ESOS if your undertaking is part of a corporate group which includes another UK undertaking or UK establishment which meets these criteria.  Where a corporate group participates in ESOS, unless otherwise agreed, the highest UK parent will act as a ‘responsible undertaking’ and be responsible for ensuring the group as a whole complies.  UK registered establishments of an overseas company will also need to take part in ESOS (regardless of their size) if any other part of their global corporate group activities in the UK meet the ESOS qualifying criteria.

Your organisation qualifies for the compliance period (phase) if, on the qualification date, it meets the ESOS definition of a large undertaking. Corporate groups qualify if at least one UK group member meets the ESOS definition of a large undertaking on this date.  All qualifying organisations must submit their completed report to The Environment Agency by the compliance date or they may be subject to substantial penalties.

PhaseCompliance PeriodQualification DateCompliance Date
16th Dec 2011 to 5th Dec 201531 Dec 20145th Dec 2015
26th Dec 2015 to 5th Dec 201931 Dec 20185th Dec 2019
36th Dec 2019 to 5th Dec 202331 Dec 20225th Dec 2023
46th Dec 2023 to 5th Dec 202731 Dec 20265th Dec 2027

If you are very close to the qualification threshold or have substantially increased or decreased in size in recent years you should read the full guidance to confirm if you qualify.  For more information on organisations that do not need to comply see section 1.2 of the full ESOS guidance.  Alternatively please feel free to contact us for a no obligation discussion with one of our ESOS Lead Assessors.

Public bodies are not included within the scope of ESOS as their energy efficiency is governed by a separate process involving regular Display Energy Certificates.  To find out more – click here.

If you qualify for ESOS and your organisation is fully covered by an ISO 50001 accreditation, you don’t need to carry out an ESOS assessment.  You will already have looked at your environmental impact and how you can reduce your energy demand as part of the accreditation process. However, you will still need to notify the Environment Agency that you are compliant with ESOS.

If you qualify for ESOS, but your organisation is not fully covered by an ISO 50001 accreditation, you need to carry out an ESOS assessment. The assessment helps you work out what your organisation needs to do to comply with the ESOS regulations.

For your ESOS assessment you will need to:

Appoint a lead assessor

You need to appoint a Lead Assessor to carry out and oversee or review your energy audits and overall ESOS assessment.  Lead Assessors can be employees or external contractors as long as they are members of an approved professional body register.

Calculate your total energy consumption

This is the energy used by assets held or activities carried out by your organisation or group. This includes the energy consumed by buildings, industrial processes and transport.

Identify your areas of significant energy consumption

This is the energy used by assets held, or activities carried out, by your organisation that account for at least 90% of your total energy consumption. Once you have completed this you need to:

  • Find out whether ISO 50001, Display Energy Certificates (DECs) or Green Deal Assessments (GDAs) cover any of your areas of significant energy consumption.
  • Identify whether ESOS compliant energy audits have been, or need to be, carried out for the areas of significant energy consumption not covered by ISO 50001, DECs or GDAs.
  • As long as 90% of your total energy consumption is covered, you can use a mix of approaches with some of your energy consumption covered by ISO 50001; some by DECs or GDAs and some by ESOS energy audits.  You will need to discuss your approach with your Lead Assessor.

Notify the Environment Agency

You need to submit your ESOS notification of compliance to the Environment Agency when you have undertaken an ESOS assessment and are compliant with your obligations.

The notification deadline was 5 December 2015 for the first cycle and every 4 years afterwards.  If you miss a deadline then your must notify the Environment Agency and submit your notification as soon as possible.

Keep records

You need to keep records of how you have complied with ESOS in an evidence pack. There is no set format for this but your Lead Assessor will be able to help you compile this.

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.

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.

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Peter Rowley

Peter has over 40 years experience in surveying commercial and industrial buildings.  A member of the Royal Institute of Chartered Surveyors (RICS), he has been involved in the implementation of the Energy Performance of Buildings Directive since it was introduced to the UK in 2007.

With a background including quantity surveying and construction education, Peter is both an experienced energy assessor and trainer.  He also provides technical advice and support to a number of accreditation schemes and approved organisations, including the auditing of submitted assessments.

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