The recent appeal case of John Anthony Turnbridge v The London Borough of Islington, one of the first reported cases around a breach of the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (MEES Regulations), highlights the importance of compliance for commercial landlords and the potential pitfalls surrounding the continued letting of sub-standard non-domestic properties.
The Facts
This case concerned an appeal by the landlord against a penalty notice for £500, which was served on him, for a breach of the MEES Regulations.
In November 2014, an EPC was obtained for the property in question, where it achieved a "G" rating. The property was let and continued to be let after 1 April 2023, which was the trigger date under the MEES Regulations for the prohibition on landlords continuing to let property which falls below the minimum standard (subject to some exemptions). For the purposes of the MEES Regulations, a property is currently sub-standard if it has an EPC rating below "E."
The property was assessed again in January 2024, after a notice was served on the landlord, under the MEES Regulations, requesting copies of the EPC and any lease or tenancy agreement for the property. At that time, the property achieved an EPC rating of "D," so was no longer being let in breach of the MEES Regulations.
The Decision
The decision was a relatively simple one to make for the court on the facts. From 1 April 2023 until 24 January 2024, the property had an EPC rating of "G" and continued to be let in breach of the MEES Regulations.
Practical Points
From a landlord's perspective, the decision is a clear reminder that continuing to let a property which has an EPC rating below "E" is a breach of the MEES Regulations and that penalties may be imposed for the breach. A breach of the MEES Regulations cannot be remedied if an EPC is subsequently obtained, even if it produces a lawful energy rating. Whilst the financial penalty of £500 (in this case) may seem a drop in the ocean, costs over a substantial portfolio may soon add up.
There have been a number of consultations which supported raising the minimum standard under the MEES Regulations but we do not, as yet, have any certainty over what the future minimum standard may be for non-domestic property. The suggestion was that it would be raised to "C" by 2027 and "B" by 2030 which, if enacted, would likely bring a large number of properties into the sub-standard bracket. Landlords will need to ensure they keep up to date with the changes to avoid the risk of breach and would be well advised to start thinking about whether there are any works which can be carried out to improve their properties now so they are ahead of the curve.
