Belgium: MEES-ery For Landlords? – Six Key Changes To The Residential MEES Regulations

Last Updated: 11 April 2019
Article by Adam Balfour

We previously blogged about the Government's public consultation on proposals to amend the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (the "MEES Regulations").

Following the consultation, the Government has published its final policy decisions and the MEES Regulations have been amended by the Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2019.

Will this affect me?

The amended MEES Regulations mean that a residential landlord cannot let a sub-standard residential property to a new tenant, or renew or extend an existing tenancy agreement with an existing tenant, unless it has either:

1. made all the relevant energy efficiency improvements that can be made to the property (or there are none that can be made) and the property's energy performance indicator is still below an EPC E, and it has registered this exemption; or

2. no improvements have been made but a valid exemption applies which has been registered.

From 1 April 2020, residential landlords must not continue to let sub-standard domestic property, even to existing tenants, unless they can rely on either of the above.

So what exactly has changed?

There are six key changes to the MEES Regulations that will take effect from 1 April 2019:

1. Removing the "at no cost to the landlord" principle

The original MEES Regulations allowed residential landlords to register an exemption on the PRS Exemptions Register (the "Register") where they were unable to make improvements to sub-standard premises with EPC ratings of F or G "at no cost" to themselves. Once registered, these exemptions were valid for five years.

However, as expected, the "at no cost to the landlord" principle is no longer available and residential landlords will be expected to pay towards the improvement of their sub-standard F and G-rated properties.

All existing exemptions obtained under the "at no cost to the landlord" principle will cease to have effect on 1 April 2020, and the Register will be updated so all such exemptions are automatically cancelled on 31 March 2020. Following this date residential landlords will be expected to do the necessary improvement works (up to the value of the cap discussed below) unless they can rely on another valid exemption.

2. Introducing a landlord financial contribution amendment capped at £3,500

Residential landlords will have to contribute up to £3,500 per property to improve sub-standard premises where third party funding is unavailable or insufficient to cover the improvements. This could be through self-funding, or through loans or other finance.

Whilst the Government has always believed any landlord contributions should be subject to a cap, the level of the cap has increased from the initial proposal of £2,500 to £3,500. However, Government analysis indicates that the average cost of improving a residential property with an EPC rating of F or G to band E is only £1,200. Crucially, the costs cap is not a spending requirement – if a residential landlord can improve its property to at least an E for less than £3,500, it will have met its obligations.

The cap includes VAT – notably, under the non-domestic regulations, improvement measures are costed exclusive of VAT but landlords of non-domestic properties can usually reclaim their VAT from HMRC, unlike typical domestic sector landlords.

3. Improvement costs incurred on or after 1 October 2017 can be included within the £3,500 cap

A landlord of an F or G-rated residential property who has made energy efficiency improvements to it on or after 1 October 2017 can count the costs of those improvements towards the cap for that property, including where funding was obtained through a third party. The landlord can subtract the cost of these previous energy efficiency improvements from the £3,500 cap to determine the value of the remaining energy efficiency improvements it must make.

Any costs incurred before 1 October 2017, however, cannot be counted towards the cap.

4. Available third-party funding can be counted within the £3,500 cap

This costs cap will apply to the overall cost of improving a residential property, rather than the cost of individual measures. This means a residential landlord need only invest a total sum up to the cap in improving the property, rather than investing multiple sums which are each individually subject to the cap.

Green Deal finance and other available third-party funding can be included within the £3,500 cap. Where partial funding is available, landlords will only be obliged to contribute the shortfall.

5. A new "high cost" exemption

There will be a new "high cost" exemption available where a sub-standard residential property cannot be improved to an EPC rating of E for £3,500 or less.

Residential landlords will need to install all measures which can be installed up to the cap, and then register an exemption on the basis that "all relevant improvements have been installed and the property remains below E".

If a landlord intends to rely on this, it will need to upload to the Register copies of three quotations from different installers. Each of these quotes must show that the cost of the cheapest recommended improvement (inclusive of VAT) exceeds £3,500 in order for the exemption to be effective. The landlord will also need to submit confirmation that it is satisfied the measures exceed the cost cap. This means that, if a landlord receives a quote for less than £3,500 from an installer that it does not wish to use, it may have no option (if all the other quotes are for more than £3,500) but to use that installer or to pay more than the cap to use an alternative.

Once registered, a high cost exemption will be valid for five years. The landlord must then make efforts to improve its property to meet the minimum energy efficiency standard.

6. Removal of the "tenant confirmation" consent exemption

Prior to 1 April 2019, a landlord could register a consent exemption if they planned to use Green Deal funding and its tenant refused to confirm that the landlord may enter the Green Deal financing agreement.

Now, where a residential landlord has secured Green Deal finance but a residential tenant withholds its consent, the landlord will be unable to rely on this as the basis for an exemption and will have to seek alternative funding – or contribute out of its own pocket subject to the cap.

An important distinction is that Landlords of non-domestic properties will still be able to rely on the "tenant confirmation" exemption.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions