Legal update
and/or building regulation consent is required and the Local Authority refuses to grant that consent. Alternatively, where there is a mortgage lender which has a charge on the property, a consent to the works might be required (although most lenders would probably be only too happy to grant their permission to works that improve the energy efficient of the building).
Permitted exemptions once registered on the PRS Exemptions Register have a shelf life of five years and the building owner would therefore have to reapply after the end of that period. There are some exempt transactions and properties to which the MEES regulations would not apply for example: n A tenancy where the term is more than 99 years or less than six months (with no right of renewal).
n Licences (which are personal contractual rights to occupy rather than the granting of an interest in the ‘bricks and mortar’).
n Tenancies at will (the barest form of tenancy, which can be brought to an end immediately on notice either by the landlord or the tenant).
n Some buildings which do not have to
have an EPC which might include some listed buildings, a temporary building or buildings where the owner intends to demolish the structures, and industrial sites (where there is no heating or cooling or other equipment for the conditioning of the environment). In practice however, most care homes are likely to be subject to the MEES regulations.
Impact on leases
The regulations will also have an impact on any leases in place between the building owner and the care home operator or where it is proposed to grant such a lease. Many care homes are owned outright and run by the care home operator. Sometimes the care home operator splits the ownership and operation between a ‘Propco’ (a company which owns the land and buildings) and an ‘Opco’ (which is a subsidiary company to which there is granted a lease of the land and buildings, and which operates the care home on a day to day basis). In such a situation it is important to consider the relationship between the Propco and Opco under the occupational lease.
If a lease of a sub-standard property is granted in breach of the new MEES
One needs to consider, in each individual case, the layout of a care home and the facilities provided
April 2023
www.thecarehomeenvironment.com
regulations, the tenant is still liable to pay the rent, service charge, and other payments, and both the landlord and the tenant must comply with their respective obligations. It is not open to either party to try to terminate or invalidate the lease simply because the lease has been in breach of the MEES regulations. Similarly, the landlord cannot seek possession of the property simply because the property is sub- standard. However, there are potentially draconian consequences for the landlord in terms of possible enforcement action. The landlord may be liable to civil penalties including either: (a) financial penalties; and/or (b) details being published of the breach on the public part of the PRS Exemptions Register (the ‘publication penalty’). This is a clear policy to ‘name and shame’ building owners who do not comply. In relation to a commercial property, the enforcement authority will be the local weights and measures authority which is part of Trading Standards. There are three types of financial penalty. Firstly, there is a penalty for a breach of the letting regulations; secondly, for registering false or misleading information on the PRS exemptions register; and thirdly, a breach of not complying with a compliance notice. The maximum financial penalty varies according to the type of property and the length of time of the ongoing breach prior to the date on which a penalty notice has been
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