2019 saw climate change making
the headlines with ‘climate emergency’ being declared the word of the year,
demonstrating that it is at the forefront of the public’s interest. As we move
into 2020, there are changes in environmental legislation which are due to come
into force and further proposed changes.
Energy
Performance
The Energy Efficiency (Private
Rented Property) (England and Wales) Regulations 2015 (“MEES Regulations”) mean that it is unlawful to grant a new tenancy
of a property with an EPC rating of E (a sub-standard property), unless an
exemption has been validly registered.
From 1 April 2020, it will be unlawful
for landlords to continue to let a sub-standard domestic property, unless they
have validly registered an exemption, or they have made all the relevant energy
efficiency improvements for the property and the property remains sub-substandard.
If a landlord breaches the MEES Regulations, they can be subject to fines and a
publication penalty.
The government has published a
consultation on amending the MEES Regulations to improve the energy performance
of non-domestic private rented properties. The consultation sought opinions on
two targets: either all non-domestic private rent properties are to achieve a
minimum EPC rating of B by 1 April 2030 (where cost effective); or a minimum
EPC rating of C (where cost effective). The government’s preference is for the
ambitious target of a minimum EPC rating of B. The outcome of the consultation
is awaited.
There are also intentions for
the government to consult on increasing the minimum energy efficiency for
domestic private rented properties.
MEES provisions are becoming
more common in leases and can impact on other aspects of the lease, such as
rent review reinstatement and dilapidations.
Conservation
Covenants
The government has proposed
the introduction of conservation covenants in England to improve the natural
environment for future generations. A conservation covenant is an agreement
between a property owner and a body such as a conservation organisation (for
example, the National Trust), local authority or government body. The covenant
could contain positive or restrictive obligations for a conservation purpose. The
covenant would be binding on future owners of the land and will last
indefinitely, unless it provides for a shorter period or is with a tenant. There
will be no restriction on the number of conservation covenants on one property.
Conservation covenants were
included in the Environment Bill 2019, but it was not passed before the
dissolution of Parliament. It is expected that the new Parliament will pick up
the Environment Bill 2019.
The potential implications of
conservation consents are not yet known. However, as with restrictive
covenants, an onerous conservation covenant could affect the value of the land and
the ability of the property owner to deal with or sell the property.
Electric
Vehicle Charging Structure
In 2019, consultations were
published by the Department for Transport looking at improving the charging
infrastructure for electric vehicles.
The consultation included proposed
amendments to the Building Regulations 2010 to include electric vehicle
infrastructure requirements. The proposals would impact on developers by
requiring the installation of charge points and/or cables (depending on whether
the building is residential or non-residential) for new buildings and where
existing buildings are undergoing major renovation (subject to exemptions). The
outcome of the consultation is awaited.
Looking
Ahead
As the public continue to
demand action on climate change, it is likely that we will see further
environmentally aware initiatives which could impact on real estate.
For real estate advice, get in touch with the
Pannone Corporate team on 0800 131
3355 or complete our contact form.
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