Rural Estates Newsletter February 2023 - Flipbook - Page 19
MEES regulations, however, and this causes a problem. Referring to the definitions
above, a farmhouse is not domestic private rented property (wrong type of tenancy)
and it is unclear whether it is non-domestic property (depending on whether
‘property’ means the building with the EPC, or the whole property let under the
tenancy). If the former, then because a farmhouse is a dwelling, it cannot be nondomestic and so is not caught by the non-domestic MEES rules either. Although it
might be tempting to try and exploit what may look like a loophole now, the more
prudent position is to treat farmhouses as though they must comply with MEES.
Doing so will be consistent with the overall intention of public policy and less likely to
create a problem for the future.
•
Sublet cottages: this at least is straightforward. Where cottages are sublet on a
relevant tenancy, from within a wider agricultural tenancy, they will be within the
scope of MEES. However, these are also the properties least likely to be compliant
and although it is the direct landlord (here, the farm tenant), who is responsible for
bringing the property up to standard, they are likely to be require the consent of the
landlord under the agricultural tenancy to make the necessary alterations.
•
Holiday lets: generally, EPCs are not required for furnished holiday lets (as defined
by HMRC), unless the occupier is expected to meet the energy costs of the building
during the period of their occupation, which is unusual. The building would also
have to be let for less than 31 days to each occupier and be let as a furnished holiday
let for more than four months of every year. There is an argument that the rent
charged for holiday lets includes energy costs, but this not referred to in government
guidance, which is otherwise clear that where the above test is met, an EPC is not
required. If an EPC is not required, then MEES will not apply.
Exemptions
If you have non-compliant property within the scope of MEES, check whether it can be
brought up to standard. If not, does an exemption apply? The maximum fine for noncompliance is £150,000 and offending landlords can also be “named and shamed” on
the register.
If you are relying on an exemption, remember that they generally only last five years and
relate to the landlord, not the property, so if the property changes hands, the exemption
must be renewed.
Rural Estates Newsletter
February 2023
•
High cost (domestic properties only): landlords are not required to spend more
than £3,500 (inclusive of VAT) on improvements to bring their domestic property
up to standard. Where there is no single improvement that can be made for under
£3,500, a “high cost” exemption can be registered. Where improvements can be
made within the £3,500 cap then those must be made and, if the property still falls
short of the required standard, an “all improvements made” exemption can then
be registered. Three quotes are required as evidence. Remember, this includes any
improvements made since 1 October 2017. Also, although a landlord can choose
which improvements to make, if they make improvements not recommended by the
EPC which fail to bring the property up to standard, an exemption cannot
be registered.
•
All improvements made: for property where all improvements have been made
(up to the £3,500 cap for domestic property) or there are none to be made and
the property remains sub-standard, an “all improvements made” exemption can be
registered. Again, three quotes are required.
19