Minimum Energy Efficiency Standards (MEES)

Owners of commercial property in England and Wales, including Self Invested Personal Pensions (SIPPs) and Small Self-Administered Schemes (SSASs) should be aware of new regulations, which came into effect on 1st April 2018. These regulations mean it will be illegal to grant any new tenancy agreement to a property whose energy performance certificate (EPC) rating falls below an "E".

The requirement to obtain an EPC was introduced in April 2008 and all certificates are valid for 10 years unless the property in question has undergone material changes during that time. 

Schemes holding property in F or G rated bands have a maximum of five years to make the necessary energy efficiency improvements to comply with the new regulations. Dentons will be working with our existing clients whose property may need to be brought up to the required minimum ratings. 

EPC certificates can only be obtained from an accredited Non– Domestic Energy Assessor. 

Certain properties do not need an EPC, if you demonstrate that the building is:

  • listed or officially protected and the minimum energy performance requirements would unacceptably alter it (not applicable to property in Scotland) 

  • a temporary building only going to be used for 2 years or less

  • used as a place of worship or for other religious activities (not applicable to property in Scotland) 

  • an industrial site, workshop or non-residential agricultural building that doesn’t use much energy

  • a detached building with a total floor space under 50 square metres

  • due to be demolished by the seller or landlord and they have all the relevant planning and conservation consents

  • land without buildings.

A building is also exempt if all of the following are true:

  • it’s due to be sold or rented out with vacant possession

  • it’s suitable for demolition and the site could be redeveloped

  • the buyer or tenant has applied for planning permission to demolish it.

Properties that hold an F or G rating will most probably be devalued by an amount at least equal to the value of the works necessary to bring the property up to at least an E rating.
As a SIPP operator, we will need to be provided with a copy of any prospective property’s EPC certificate before we can formally accept the property as an asset on our SIPP book.