MEES Exemptions: When a Commercial Property Can Legally Stay Below Band E

Overview

The Minimum Energy Efficiency Standards (MEES), introduced under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (SI 2015/962), set a minimum EPC rating of Band E for commercially let properties in England and Wales. Since 1 April 2023, this applies to all existing commercial leases, not just new lettings.

However, the regulations recognise that not every property can be brought up to Band E. Regulations 25 to 35 of SI 2015/962 set out a series of specific exemptions that, when properly registered, allow a landlord to continue letting a property that would otherwise be non-compliant. Each exemption lasts for five years from the date of registration, after which it must be reassessed and re-registered if still applicable.

This article explains each exemption, the evidence required, and how to register correctly.

Exemption 1: All reasonable improvements made

This is sometimes called the "golden rule" exemption and is set out in Regulation 25 of SI 2015/962. It applies where the landlord has made all cost-effective energy efficiency improvements that can reasonably be made to the property, but the EPC rating remains below Band E.

The test for "cost-effective" is based on a seven-year payback period. An improvement is considered cost-effective if it would pay for itself through energy savings within seven years. If every improvement that meets this payback test has been installed, the landlord qualifies for an exemption even if the property remains rated F or G.

Critically, the landlord must also demonstrate that third-party funding options (such as the Green Deal or Energy Company Obligation) have been explored. If third-party funding was available and was not pursued, the exemption may not be valid. The EPC recommendations report is the starting point for identifying which improvements apply.

Exemption 2: High cost

Under Regulation 28, a landlord is exempt if the cheapest single recommended improvement that could raise the EPC rating costs more than £3,500 including VAT. This is a per-improvement threshold, not a total cost cap. If the EPC recommendations report lists three improvements at £2,000, £4,500, and £8,000, the landlord must install the £2,000 improvement (because it falls below the cap) but is exempt from the £4,500 and £8,000 improvements.

The £3,500 figure applies per individual improvement measure. If installing the cheaper improvements brings the property to Band E, no exemption is needed. The exemption only applies where, after installing all improvements that cost £3,500 or less, the property still does not reach Band E.

Exemption 3: Consent refused

Regulation 31 provides an exemption where the landlord has applied for the necessary consent to carry out an energy efficiency improvement, and that consent was formally refused. This covers three specific scenarios:

• Tenant consent: Where the lease requires tenant consent for works and the tenant has refused in writing.
• Planning permission: Where the improvement requires planning permission and the local planning authority has refused the application.
• Listed building consent: Where the property is a listed building and Historic England or the local authority has refused consent for the improvement on heritage grounds.

The refusal must be documented. A verbal objection from a tenant is not sufficient. The landlord must have made a formal written request and received a formal written refusal.

Exemption 4: Devaluation

Under Regulation 32, a landlord is exempt if a RICS-certified surveyor provides a written opinion that installing a recommended energy efficiency improvement would reduce the market value of the property by 5% or more. This is a relatively high bar to meet and is most commonly applied to properties where, for example, external wall insulation would materially alter the appearance or character of the building in a way that reduces its commercial value.

The surveyor's opinion must be independent and must specifically reference the improvement in question. A general statement that "improvements would reduce value" is not sufficient, the opinion must relate to a specific recommended measure from the EPC.

Exemption 5: Wall insulation

Regulation 33 provides a narrow exemption for properties where wall insulation is a recommended improvement but installing it would cause damage to the fabric or structure of the building. This most commonly applies to solid-wall buildings, typically pre-1920 commercial stock, where internal or external wall insulation could cause moisture problems, structural issues, or damage to historic fabric.

This exemption requires expert evidence (typically from a building surveyor or conservation officer) confirming that wall insulation is not suitable for the property. It is a relatively rare exemption but is important for older commercial buildings where wall insulation is often the single largest improvement recommended on the EPC.

Temporary exemption: New landlord

Regulation 35 provides a temporary exemption for new landlords who acquire a property that is already let with a sub-minimum EPC rating. The new landlord has six months from the date of acquisition to either bring the property into compliance or register one of the permanent exemptions described above.

This is a transitional provision, not a permanent exemption. After six months, the new landlord is in the same position as any other landlord, they must either meet the minimum standard or hold a valid registered exemption. The six-month period runs from the date of completion of the property acquisition, not from the date the landlord becomes aware of the EPC rating.

How to register an exemption

All MEES exemptions must be registered on the PRS Exemptions Register, which is maintained by the Department for Levelling Up, Housing and Communities (DLUHC) and is accessible via GOV.UK. Registration requires the landlord to provide:

• The property address and EPC reference number
• The specific exemption being claimed (by regulation number)
• Supporting evidence (e.g. EPC recommendations report, surveyor's report, written refusal of consent, quotes for improvement works)

The exemption must be registered before the property is let, not after enforcement action begins. A landlord who lets a non-compliant property without a registered exemption is in breach of the regulations, even if they would have qualified for an exemption had they registered it in time.

Penalties for failure to register when required follow the same framework as penalties for non-compliance: up to 20% of the rateable value of the property, subject to a maximum of £150,000 per property under SI 2015/962, Regulation 39. Compliance notices are published on a public register.

What Band C 2028 means for existing exemptions

The UK government has proposed raising the minimum EPC requirement for commercial lettings from Band E to Band C by 1 April 2028. This is a proposed regulatory target, it is not yet confirmed law as of April 2026. The consultation has closed and the Government response is awaited.

If the Band C target is enacted, the exemption framework may be revised. The proposed regulations could change the cost thresholds (currently £3,500), modify the payback test, or remove certain exemptions entirely. Landlords who currently hold valid exemptions under the Band E rules should not assume those exemptions will automatically carry over to the Band C regime.

Until the final regulations are published, the current exemption framework under SI 2015/962 remains in force. Landlords should continue to register exemptions where applicable under the existing rules, while monitoring the progress of the Band C legislation.