Following a shift in focus for the Heat in Buildings Bill, the Scottish Government is consulting on draft regulations to introduce Minimum Energy Efficiency Standards (MEES) in the private rented sector (PRS). These proposals revive plans originally intended for 2020, using powers from the UK-wide Energy Act 2011, which forms the basis of existing English MEES.
The headline proposal, with potential to cause disruption to the rental market, is, from 1 April 2033, it will not be possible to let a property that is below Energy Performance Certificate (EPC) Band C (based on a reformed EPC system). MEES will be phased in, from 1 April 2028 for grant of new tenancies, with properties where tenants don’t change having until 2033 to comply.
Energy Performance Certificate Reform
Currently, EPCs reflect the cost-efficiency of heating a property, meaning properties with poor insulation but cheap heating fuel can still gain a reasonable EPC rating. Under new greener reform plans however, the main metric of the EPC will focus on the fabric of the property and how well it retains heat, giving each property a Heat Retention Rating (HRR).
The intention behind this change is to promote improvements to the building fabric overall, crucially reducing energy demand across any energy type used. Around 80% of Scottish dwellings currently reaching EPC C are anticipated to reach EPC HRR C.
Reformed EPCs will also include a detailed Heating System Type Rating to better reflect real world energy performance. This will show current and potential emissions of the main heating system, thermal efficiency and running costs; and an Energy Cost Rating, based on a cost to run the home to standardised conditions.
MEES Property Scope and Exceptions
MEES will apply to properties which are subject to the Repairing Standard in Scotland – a legal benchmark that all privately rented properties must meet to ensure they are safe, habitable, and well-maintained. This covers most private sector tenancies, including employment-related accommodation. Currently, the Repairing Standard is due to be extended to all residential properties within agricultural and crofting tenancies in March 2027. However, in acknowledgement of the difficulties such a prohibition on letting could involve, the Scottish Government proposes that these properties are excluded from MEES. Short-term holiday lets are also proposed to be excepted.
MEES Exemptions
MEES exemptions rely on the concept of the “relevant energy efficiency improvement”, being one which is:
- Listed in the Regulations (the draft regulations provide an indicative list);
- Listed in the property’s EPC recommendation report; and
- Able to be financed wholly or partially via Scottish Ministers’ grants or loans, wholly by a green deal scheme, or is provided free of charge through energy company obligations (e.g. the ECO4 scheme)
It will be possible to let a property not meeting EPC HRR C if either all “relevant energy efficiency improvements” have been made, there are no “relevant energy efficiency improvements”, or an exemption applies. In each case, the landlord will have to apply) for inclusion on a new PRS Exemptions Register with evidence supporting their circumstances.
The principal exemptions are:
- Lack of Consent
The landlord has been unable to obtain the current tenant’s consent to works or a required third-party consent (including e.g. planning or listed building consent) was unable to be obtained, refused or granted subject to a condition with which the landlord cannot reasonably comply.
- Negative impact on fabric or structure
The landlord has a written opinion from a relevant person that the only outstanding relevant energy efficiency improvement is not appropriate to make due to potential negative impacts on fabric or structure of the property.
- Cost Cap
There will be a maximum required spend of £10,000 (including the cost of obtaining new EPCs). Works will count towards the cost cap only if undertaken in the period of 12 months prior to the Regulations coming into force.
The cost cap exemption is proposed to last until change of ownership. Other exemptions would last five years/until change of tenant as appropriate, to allow for changes of technology or policy in the interim.
Enforcement and Penalties
Local authorities will have power to serve financial penalty notices if they find a breach of MEES regulations within the last 18 months. They can also serve compliance notices to request information and documents that help them assess whether the property meets the required standards.
The proposed penalties are:
| Breach | Penalty |
| Breach of MEES, in breach for less than six months | £600 |
| Breach of MEES, in breach for six months+ | £3000 |
| Submission of false or misleading information in connection with an exemption application | £600 |
| Failure to comply with a compliance notice | £600 |
The maximum financial penalty is currently £5,000 but it is proposed that in future this could rise up to £30,000, in accordance with proposals to amend the enabling legislation to provide for such an increase.
Concerns
The timeline for these Regulations is dependent on EPC Reform, which in turn is dependent on UK Government work on the modelling system used for the calculations. New EPC Regulations are expected this Autumn, but unlikely to come into force until Autumn 2026.
There are legitimate concerns around workforce availability to undertake improvements and timelines for works. Works before 1 April 2027 won’t count towards the cost cap, which is likely to put landlords off from doing work earlier and has the potential to exacerbate demands on an already stretched workforce
If you are interested in providing experience or views to inform the proposals, the consultation is open for responses until Friday 29 August.
