MEES Regulations And Dilapidations Update

Online content includes 120 days access from the date of purchase.
All purchases are for a single user only.

With concurrent changes to EPC assessment and the Building Regulations, combining with the proposed increase to a minimum standard of ‘B by 2030’ under MEES, there is much heightened uncertainty, risk, and opportunity around a building’s energy efficiency. Here we will look at some worked examples of:

• How much should prospective property purchasers be looking to reduce their offer in light of a given EPC rating? How can a vendor avoid such a discount?
• How can a lease deal be structured to protect a landlord against the impact of MEES? What are the most advantageous terms for tenants?
• Can a higher rent be justified by a better EPC rating?  Can tenants gain a ‘brown discount’ for poorer performing properties? What happens at rent review?
• What happens when a landlord faces enforcement action?  Can either party end the lease early? What are the remedies?

Dilapidations is a field which has seen much fluctuation during the course of Covid. Increased occupier moves bidding to reduce overheads combined with landlords in increasingly challenging markets have led to parties taking staunch negotiating positions. Here we will look at some current trends and innovations in dilapidations, including:

• VAT in Dilapidations – an already complicated matter made even more difficult by an HMRC gaff – clarity at last?
• Cost of works and Tender Price Index – the dangers of landlords not accounting for the rise in tender pricing between claim production and settlement.
• Impact of MEES upon Dilapidations – an increasingly silver bullet?
• Capital Allowances in Dilapidations – how tenants may immediately reduce items of claim by 25% through simple principles of identifying a landlord’s actual net ‘loss’.

Ben Strange, Director, Mobius Building Consultancy Ltd