Tag Archives: Sustainability

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 is current consulting with a view to withdrawing this exemption and replacing it with a capped cost.

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 have to make particular improvements like those listed on the EPC? Are there any recommended or required materials which should be used to undertake the improvement works?

The guidance issued by the Department for Business, Energy & Industrial Strategy on this subject is very clear.  It states:

There are no specified materials or improvement measures; a landlord is free to do whatever they like with their property so long as the EPC rating can be raised to meet the Minimum Energy Efficiency Standard. The most assessable source of advice would be the recommended measures section on EPC for the property, but landlords can seek advice from other suitably qualified experts if they wish.

Are Houses in Multiple Occupation (HMOs) excluded from the PRS Regulations and MEES?

HMOs are not excluded from the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015. The Regulations apply to all privately rented properties that are legally required to have an EPC, and where rooms are let on one of the qualifying types of tenancy (most likely assured tenancies). An HMO will be in scope where it meets these criteria.

However, individual rooms within HMOs are not required to have their own EPC, so a property which is an HMO will only have an EPC if one is required for the property as a whole (typically this will be if the property has been build, sold or rented as a single unit at any time in the past 10 years). If an HMO is legally required to have an EPC, and if it is let on one of the qualifying tenancy types, then it will be required to comply with the minimum level of energy efficiency.

NB:  Many HMOs are run on a commercial basis and as such are business premises.  Where this is the case they would normally require a non-domestic EPC like a hotel, hostel, care home or student accommodation block rather than a domestic EPC.

What exemptions exist for MEES (Domestic Buildings)?

Whilst the exemptions are relatively straight forward, applying them is more complex and can also involve understanding the separate regulations that apply to both Energy Performance Certificates and the Minimum Energy Efficiency Standards.  There are some organisations suggesting that landlords can easily avoid improving their buildings by claiming an exemption.  Our experience is that this is more difficult than it first appears and could easily cost more than improving the building to meet the standards.

Exempt buildings and tenancies

Not all buildings and tenancies fall within The Energy Efficiency (Private Rental Property) (England and Wales) Regulations 2015.  The MEES do not apply to:

  • Buildings that have not been legally required to have an EPC.  These can include some listed buildings (see our specific notes on this topic), temporary properties, some HMOs and holidays lets.  It will also apply if the property has not been built, sold, let or significantly altered since the introduction of EPCs.
  • Buildings without a valid EPC.  This would include buildings where the EPC is over ten years old when it is relied upon for the MEES regulations.
  • Buildings only with a voluntary EPC.  An EPC may have been lodged for any number of reasons.  EPCs completed for purposes other than the construction, sale, let or significant alteration of the building, including those lodged in a mistaken understanding that one was required, are known as voluntary EPCs.  A building is only subject to MEES if the EPC was legally required.  NB: There is currently no way to tell this from the EPC itself and so you will need to know the history of whether or not the building has legally required an EPC.
  • Buildings occupied solely under licence.  MEES only applies to buildings occupied under a “Relevant Tenancy”.  This includes an assured tenancy, a regulated tenancy and domestic agricultural tenancies.  If the occupier is present only under a licence to occupy the MEES requirements will not apply as there is no tenancy.
  • Social housing schemes.  The regulations apply only to privately rented properties.  Social housing is exempt from MEES regardless of its condition, quality, or EPC rating.

Exemptions from making improvements

There are a number of circumstances where an exemption or multiple exemptions from making improvements can be claimed.  Where an exemption of this type is claimed, it may be possible to continue to rent out a substandard property.  However, all exemptions of this nature must be lodged on the PRS Exemptions Register.

Additionally, it should be noted that specific supporting evidence is required before registering an exemption on the PRS Exemptions Register.  We can provide specialist advice in this area as part of our service but would always caution clients that meeting these requirements can cost significantly more than making improvements to meet the MEES.  This will obviously depend upon the building and the improvements required but changing a few lights will likely be cheaper than obtaining professional services to prove a property will be devalued for example.

Registered exemptions are also non-transferable.  At best they are valid for a maximum of five years but a change in tenant or sale to a new landlord will normally mean the process (and costs involved) will have to be repeated.  Only then can new exemptions be registered.  There are also significant penalties for making a false or misleading declaration on the PRS Exemptions Register.

The main exemptions from making an improvement are:

  • All relevant improvements have been made – Where all the improvements suggested have been made and the property still remains below the MEES.
  • Incompatible wall insulation improvements – Where independent experts conclude that it is inappropriate to make the wall insulation improvements suggested as they would have a negative impact on the structure or fabric of the property (or the building of which it is part).
  • Improvements which cannot be financed without cost to the landlord – Landlords are not required to make improvements where relevant “no cost” funding is not available.  However, they must attempt to take advantage of funding that is available and must be able to demonstrate this.  Improvements that do not meet the new “Golden Rule” for Green Deal funding may fall within this exemption but only if alternative funding is not available.
  • Devaluation of the property – You are not required to make an improvement where an independent surveyor determines that making it would devalue the property by more then 5% of its current market value.
  • Third Party Consent is refused – Where there is a sitting tenant you might complete the formal process required in offering to improve the property and consent may be withheld.  Equally, you may require consent from a superior landlord, a bank or building society or the local authority which may be reasonably refused.  However, you will have to demonstrate that you have applied for permission and have tried to accommodate any reasonable restrictions that they have placed upon you before you can claim this exemption.  This exemption can also be used where planning, conservation or other consents are required from statutory authorities providing it can be demonstrated that these have been applied for and refused.

Please note that every suggested improvement must be considered individually for the purposes of claiming exemptions.  It is therefore highly likely that, even where some improvements may be subject to exemptions, others will not.  In this situation, some improvements to the building will still need to be made.

Are Listed Buildings exempt?

There is a lot of confusion about exemptions relating to listed buildings and buildings within a formally designated conservation area.  Firstly, the exemptions that exist appear to vary between administrations in the UK and are different for different forms of assessment.  Secondly, the supporting guidance, particularly in England & Wales, is regularly updated and can appear inconsistent or incomprehensible.

Air Conditioning Energy Assessments & Display Energy Certificates

Dealing first with these two assessments, the need for compliance is not affected by the historic nature or otherwise of the building.  As such, no exemptions from the requirements for these assessments exist specifically for buildings that are listed or in formally designated conservation areas.

Listed buildings and those in formally designated conservation areas are treated as any other building is treated and require Air Conditioning Energy Assessments (ACEAs) and Display Energy Certificates (DECs) if they meet the other qualifying criteria.

Buildings in Scotland

The Scottish Government has not attempted to exempt listed buildings or buildings in formally designated conservation areas from their regulations for energy efficiency.  Instead, they have taken an approach where an assessor is required to consider the impact of improvement measures and their appropriateness for the specific building in question.   As such, no exemptions from the requirement for an Energy Performance Certificate exist specifically for buildings that are listed or in formally designated conservation areas. [Click here to see guidance]

Listed buildings and those in formally designated conservation areas in Scotland require Energy Performance Certificates (EPCs) and Section 63 Action Plans if they meet the other qualifying criteria.

Buildings in England & Wales

Put politely, the situation for buildings in England and Wales is about as clear as mud.  The wording in the current regulations is taken directly from the European Directive and says “buildings officially protected as part of a designated environment or because of their special architectural or historical merit, in so far as compliance with certain minimum energy performance requirements would unacceptably alter their character or appearance.”

When these regulations were enacted on 9th January 2013, it was generally accepted that listed buildings were exempt from the requirement for an EPC for sale or let although it was acknowledged that they would still require an EPC in other circumstances (e.g. Green Deal).  This belief was re-enforced by guidance published by Historic England which includes the statement “An Energy Performance Certificate (EPC) is a legal requirement when building, selling or renting a property. However, there are exemptions for certain types of building and since January 2013 listed buildings have been exempted from the need to have an EPC.”  However, Historic England’s Terms and Conditions include the usual disclaimers regarding their interpretation of the law in that the position stated was just their interpretation and that they accept no liability for its accuracy.  In the absence of enforcement action or legal precedents being set, much discussion has continued both in and out of the legal community with differing interpretations resulting.

Moving forward to the latest guidance to come from The Department of Business, Energy and Industrial Strategy, the UK Government Department which now has responsibility for EPCs.  Issued in February 2017, this update is contained within the guidance for landlords and enforcement authorities on the minimum level of energy efficiency required to let non-domestic property under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015.  The advice, published in Chapter 1 on page 19 is shown below:

“There is a common misunderstanding relating to listed buildings and whether they are exempt from the requirement to obtain an EPC. Listed properties, and buildings within a conservation area, will not necessarily be exempt from the requirement to have a valid EPC and it will be up to the owner of a listed building to understand whether or not their property is required to have an EPC. Where a listed privately rented non-domestic property, or a property within a conservation area, is required to have an EPC, that property will be within scope of the minimum energy efficiency standards.

“As noted at 1.3.3 above, an EPC is not currently required for a listed property or building within a conservation area when it is sold or rented in so far as compliance with minimum energy performance requirements would unacceptably alter its character or appearance. Examples of energy performance measures which may alter character or appearance (or as a minimum are likely to require local authority planning permission to install on a listed building) include external solid wall insulation, replacement glazing, solar panels, or an external wall mounted air source heat pump. Where character or appearance would not be altered by compliance with energy performance requirements, an EPC may be legally required.

“If an owner or occupier of a listed building is unsure about whether their particular property is or is not required to have an EPC, appropriate advice should be sought at the earliest opportunity.”

Exactly the same information is contained within the equivalent publication for domestic properties which has been published more recently in October 2017.  Changes in other guidance documents issued by MHCLG (formerly DCLG) and BEIS have also been made to reflect this.  However, whilst they tend to reduce the previously special status given to listed buildings to a par with other designations including Conservation Areas, National Parks, Scheduled Monuments and protected parks and gardens, they do little to clarify exactly how far an exemption applies.

This guidance would seem to suggest that the UK Government believes the exemption for listed buildings is much more restricted than had previously become accepted.  Indeed, it would appear to be more compatible with the Scottish Government’s interpretation that the exemption is solely from making improvements that would unacceptably alter the protected building’s character or appearance and not from the entirety of the process.  Similarly, it would appear to reflect an expectation that reasonable improvements, particularly where these would improve the energy efficiency of a building whose performance is currently very poor, should be carried out.

This is not without merit or logic. At the current time, an EPC in itself does not mandate that any works actually be carried out. The recommendations are just that, recommendations. Therefore a view could be formed that having an EPC can never unacceptably alter the character or appearance of the building. As such it could be argued no building can claim exemption from having an EPC on these grounds alone. Additionally, the current requirements under the MEES include provision for exemptions from making specific improvements where required third party consent cannot be obtained. Hence, if Listed Building Consent cannot be obtained from the relevant authorities no unacceptable alteration to the character or appearance of the building is required and so again, there is no need to apply this exemption from having an EPC.

Many councils provide guidance on improving historic buildings with Westminster City Council providing some of the most extensive and practicable advice we have found. This includes a document titled “Energy Efficiency in Conservation Areas” which discusses improvements that can be made without damaging historic structures.

Whilst Historic England seem yet to update their specific guidance on this limited exemption, they do provide a wealth of information for those wishing to improve historic buildings without damaging their character and appearance.  Indeed, they acknowledge that ensuring a building remains useful and occupied is often the best way of protecting it for the future.  Additionally, some energy improvement measures can also improve fire safety and resilience in historic buildings.  It should be remembered that it was never the intent of the protection schemes to freeze buildings in time but instead to ensure that they are managed with appropriate sympathy and conserved for the future.

The background to this issue is also explored in a recent article by The Residential Landlords Association.  They make the following observation in relation to the exemption of Listed Buildings from EPCs:

“So in reality, in terms of an EPC, the caveat is meaningless. Therefore, a landlord cannot know if an EPC is needed before they have an EPC for the property”

This article continues to draw the following overall conclusion:

“Regrettably, we simply do not know the answer to whether or not an EPC is required for a listed building; nor whether landlords who have rented out listed buildings will have to comply with Minimum Energy Efficiency Standards (subject to any other available exemption, e.g. limiting the amount they have to spend); or whether you need an EPC for a listed building in order to be able to rely on regaining possession under Section 21 of the Housing Act 1988. What is clear is that if you have no EPC then you do not have to comply with Minimum Energy Efficiency Standards from 2018 onwards. You could be liable for a penalty for not having an EPC and equally you might not be able to get possession back relying on Section 21. This is a wholly unsatisfactory state of affairs which needs to be addressed by the Government.”

Interestingly, at a recent industry conference (Spring 2018), representatives of both MHCLG and BEIS confirmed that they believed Listed Buildings should have EPCs completed and that recommendations should be implemented wherever possible but with appropriate sympathy to the building as a whole.  They were unaware of the conflicting guidance from Historic England which they accepted may be the source of a lot of the current confusion and undertook to attempt to ensure that Historic England updated their guidance to more accurately reflect the limitations of any exemptions which may be available.

Unfortunately, as energy assessors, we are not in a position to provide legal advice but present this information to help you form your own opinion.  However, we would point out that there is currently nothing to stop an EPC being completed on a voluntary basis even when one is not required by law.  This may have its own implications and so building owners and occupiers should seek their own legal advice but voluntary compliance may provide a suitable solution.

Some listed buildings in England & Wales may be exempt from some or all of the Energy Performance Certificate (EPC) and Minimum Energy Efficiency Standards (MEES) requirements.  However, specific legal advice should be sought on a case by case basis.  It is unlikely that an exemption can be demonstrated without first having an EPC completed to confirm the recommendations proposed.

Buildings within formally designated conservation areas are less likely to be subject to exemptions.

How long is a Display Energy Certificate and Advisory Report valid?

England, Wales & Northern Ireland

The validity of a Display Energy Certificate (DEC) and Advisory Report (AR) depend upon the floor area of the building.  For buildings with a floor area greater than 1000m2, the DEC is currently valid for one year and the AR for up to seven years.

For buildings with a floor area greater than 250m2 but less than 1000m2, both the DEC and AR are currently valid for up to ten years.

However, significant changes to the occupation of the building or its floor area may require a new DEC or AR.  As the DEC relates to the occupier not the building, a change in occupier will require a new DEC.

Scotland

In Scotland DECs are required annually for building deferring their Section 63 Action Plans and so all DECs are valid for one year.

There is no requirement to have an AR in Scotland and so a validity period is not relevant in this context.

What is involved in the As Built (Final) Stage of a SAP Calculation?

Once construction is complete and the final details have been confirmed, the assessor finalises the SAP calculation and creates the Energy Performance Certificate.  The EPC provides a rating of energy performance based upon the dwelling as it has been built. The EPC must, by law, be displayed in a new dwelling put up for sale on the open market.

In addition there are other documents that are required by Building Control such as the SAP worksheet report and the SAP data input report.  The assessor will provide all of these documents to the client to pass on to their Building Control officer to enable the completion to be signed off.  The exact process here depends upon the location of your building as the system is different is some parts of the UK.

What is involved in the As Built (Draft) Stage of a SAP Calculation?

During construction it may be necessary to make some amendments to the design.  Keeping your assessor informed during this process and seeking their advice prior to confirming any changes will help to ensure that your finished building will comply with the regulations.

Once construction is complete an air pressure test (sometimes called an air tightness test or air leakage test) may be required.  This test confirms the air tightness of the finished building to ensure it is energy efficient.  Once the test is complete you will need to provide details to your energy assessor.  If an air pressure test is not required you may still wish to obtain one.  If the result of a test is not available then the assessor will use a default value in the SAP calculations which is worse than most well constructed buildings will obtain.  Having a test conducted voluntarily is likely to improve your final rating and help demonstrate that you have complied with the regulations.

During this stage the assessor will edit the SAP calculation to reflect the results of the air pressure test and any variations to the specification.  The approved software is used to check that the completed dwelling still meets the requirements of the Building Regulations with regards to the conservation of fuel and power.  If for any reason the building does not meet the required standards, the assessor can advise remedial action to get your project back on track.

The assessor will also check to ensure that any new building is registered on the Government’s central database register of national property addresses.  If it is not, the assessor will arrange for the address record to be created.

What is involved in the As Designed (Final) Stage of a SAP Calculation?

Once the As Designed (Draft) stage has been completed, the client, building designer and the assessor agree the finalised version of the design.  This may involve amendments to the initial design in order to achieve SAP compliance.

The data in the approved software is then updated to reflect this final design.  The software is then used to produce the reports that the client or designer need to submit to Building Control.  This will include a Predicted Energy Assessment (this provides a rating of energy performance based upon the specified design).

What is involved in the As Designed (Draft) Stage of a SAP Calculation?

The accredited energy assessor uses the plans and drawings provided to prepare summary information for the building.  This includes calculating the total floor area of the dwelling; the floor area of the lounge or living room; the areas of the heat loss floors, heat loss walls and heat loss roofs; the dimensions of external windows and doors; and storey heights etc.

The assessor then calculates the performance of the thermal elements from the specifications provided. These are expressed as ‘U’ values; the rate at which heat passes through the fabric of the building.  The higher the ‘U’ value, the greater the rate of heat loss.

The assessor then inputs all this data into the approved software to produce the SAP calculation.  Data is entered relating to:

  • Type of dwelling;
  • Floors;
  • Walls;
  • Roofs;
  • Openings (windows, doors, roof lights);
  • Ventilation;
  • Main and secondary space heating;
  • Hot water generation;
  • Renewable technologies, including photovoltaic panels and solar water heating;
  • Energy efficient lighting.

The software determines whether the proposed dwelling will comply with the requirements of the Building Regulations with regards to the conservation of fuel and power.  The assessor is able to use the software to model different variations of the design if the initial specification doesn’t show compliance.  The assessor can then advise the designer of the shortfalls and recommend solutions as required.

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