MEES Part 3

Its Phil again, third part, last in the series MEES, minimum energy efficiency standards. So the five exemptions that can apply if you get on the exemption register. Firstly as we mentioned previously if as a landlord you have undertaken all relevant and available energy efficiency improvements, listed in the Green Deal and identified as recommended improvements in a report for Green Deal. By someone recommending otherwise in a professional capacity, or a surveyor, and you cannot get the property above an F, so it’s not at the E level, and that applies for an exemption.

Secondly if as a landlord you need to do work to a property, you need consent from the tenant. If the tenant will not give consent or you can’t obtain it then you cannot do the work, you can claim an exemption. Thirdly if you are a landlord who’s only recently become a landlord of that particular property, then there are certain things you’ll probably need to get consent on in order to do any work. From the mortgage lender you may need planning permission, if you have a flat you may need freeholders consent. If you can’t obtain it, you can’t do it, you get an exemption.

Fourthly, if the improvements needed are confirmed by an independent qualified surveyor that they will devalue the property by an excess of five percent, then you have a right to claim exemption. Lastly and this only applies realistically to wall insulation and primarily external wall insulation. It is written in the opinion of a qualified person, again primarily a surveyor or the person doing the work, is accredited to do the work in a professional capacity. The improvement will have an appropriate negative impact on the fabric or structure of the property, then you can qualify for an exemption.

So at this moment in time any work that you do to improve the property to that [inaudible 00:02:40] or above level for the EPC, is wholly financed by Central Government through grants, loans et cetera. It’s through their funding, it’s at no cost to the landlord. However, bear in mind there’s a consultation paper out early this year, finished on the 13th of March, where they are looking to get contributions up to a maximum of £2,500 from the landlord for each property that is improved. To be honest I can’t see them not pursuing that given the current financial situation of the councils and government. Time will tell but I’m sure you need to be very much aware of that.

So we’ve talked about the five exemptions, they have a five year validity, however in terms of time scale, yet again there are two exceptions. The landlord who recently became a landlord, only has an exemption period of six months in which to get all the information they need, the consents obtained and get the work done. Secondly the tenant who withheld consent for access to do the work, that exemption will only last the length of the tenants’ tenancy, when the tenant moves out then the work must be done. Now these exemptions cannot be passed to a new owner or landlord upon either sale or transfer. When the sale or transfer takes place the exemptions ceases and you either have to go back through agreeing to a recommendation or get the work done that was recommended.

Lastly then lets talk about finance, the Green Deal package, the Green Deal finance. In the past Green Deals had a pretty bad name, the government have tried very hard given their sincere desire to see carbon emissions reduced at a fairly cheap cost to them, to make this work. So there’s no upfront costs, we’ve covered that. The way this will work at the moment is for there to be a loan attached to the electricity bill for the rented property, for the energy efficiency improvement only. This actually will be registered as a Green Deal charge attachment. So the tenant will pay over the course of the time, the landlord won’t, but the tenant should receive commensurate reduction in their energy bills to make it a success.

The golden rule attached to this is in the first year the cost cannot exceed the estimated first year savings. So that’s very important, you can’t have the cost of the actual loan far higher than the savings the tenants making, ’cause that’s punitive. The other golden rule is the overall repayment period cannot exceed the lifetime of the measures installed. When you think about it that makes perfect sense, but it is important. So there we have it, that’s MEES. In terms of exemptions you can see it’s not straightforward, it sounds it but you have to have a qualified person in the majority of cases to actually give you the tick box to say you can do it. Moving forward there are still some changes that could come about, but obviously I’ll keep you informed as and when they appear or we know further.