Minimum Energy Efficiency Standards for private rented residential properties in Scotland

Scotland currently has no minimum energy efficiency standards (MEES) but that is about to change. The Scottish Government has confirmed that it will be introducing MEES for the private rented residential sector and is currently consulting on the Draft Energy Efficiency (Domestic Private Rented Property) (Scotland) Regulations which would apply the standards.

Background

The private rented sector accounts for around 300,000 homes and has some of the highest rates of fuel poverty in Scotland. The Scottish Government estimates that installing certain measures and improving energy efficiency in the private rented sector could reduce emissions by 5% across the sector as a whole and alleviate fuel poverty for many.

Which residential properties could be subject to MEES?

The proposal is for MEES to apply to all tenancies to which the Repairing Standard applies, that is, “any tenancy of a house let for human habitation.” Generally speaking, this means all privately rented residential properties will be subject to MEES. There will be some exceptions, however.

Which residential properties will not be subject to MEES?

Social housing will not be subject to MEES because it has been required to meet its own standards since 2014. The consultation also proposes excluding properties subject to crofting, small landholding and agricultural tenancies and properties used for short-term holiday lets.

How will MEES be assessed?

New energy performance certificates (EPCs) which are scheduled to be introduced in 2026 will be required to assess whether the MEES have been met. The new EPCs will:

• introduce a new Heat Retention Rating (HRR) rating which focuses on the fabric of the building and directly measures how well it retains heat to maintain a comfortable temperature;
• show a Heating System Rating confirming whether the heating system is polluting, hybrid or clean and its emissions and efficiency;
• continue to show the costs of energy to heat and run the home (the newly termed ‘Energy Cost Rating’); and
• last for five years (and not 10 years like current EPCs).

In the previous version of the draft regulations in 2019, MEES could be met by either obtaining an EPC at the required rating or carrying out a list of prescribed works to the property. The choice to do works to meet the MEES will not appear in the new regulations.

What rating will be used for MEES?

The consultation proposes that privately rented residential properties will require a minimum EPC HRR of band C. A property which does not meet this standard will be a sub-standard property.

Band C in the HRR will be broadly in line with the current EPC band C rating but the Scottish Government notes that some homes with a current EPC rating of C will not achieve an HRR C rating under the new EPCs. This could mean additional works for some landlords as the Scottish Government proposes that landlords will not be able to rely on EPCs issued under the current system but will have to obtain a new EPC with an HRR rating of band C or above.

When will MEES apply?

The current plan is for MEES to apply:

• from 1 April 2028 when a landlord grants a tenancy to a new tenant; and
• from 2033 when a landlord grants a new tenancy and / or continues to let a property to an existing tenant.

What happens if a property is sub-standard?

When MEES apply, a landlord will be prohibited from letting a sub-standard property unless:

• all relevant energy efficiency improvements identified in the EPC have been made; or
• all relevant energy efficiency improvements identified in the EPC that can be made have been made; or
• the property is exempt.

What types of energy efficiency improvements will be relevant improvements under the proposed regulations?

Relevant improvements will be those listed in the EPC for the property. The draft regulations set out a number of potential improvements which may appear in the new EPCs including different types of insulation, double, secondary and triple glazing, blinds, draught proofing, chimney blockers and solar air positive input ventilation.

Will there be any exemptions from MEES?

The Scottish Government has acknowledged that MEES will have to be flexible to ensure the regulations are ‘fair, affordable and achievable’. Landlords will not always be able to make the relevant improvements, for example if the improvements are not technically suitable for the property, not feasible in financial terms or not possible because of obstructions such as lack of consent from third parties.

It is therefore proposed to frame exemptions around negative impacts on the fabric or structure of a property and lack of consent, as well as to have temporary exemptions and a cost cap. The most contentious of these may be the cost cap. The consultation asks whether a cost cap of £10,000 per property is appropriate and whether the cap should remain in place until the property ownership changes.

A landlord claiming an exemption will have to submit the required information for registration in a new PRS Exemptions Register, to ensure transparency about which properties are exempt and why.

Who will monitor and enforce compliance?

The draft regulations place the responsibility for monitoring and enforcing compliance on local authorities. The consultation asks if they are the correct bodies for this.

What will the penalties be for non-compliance?

Penalties will include financial or publication penalties or both. The proposed financial penalties are as follows:

• Breach by the landlord of the regulations will attract a penalty of £600 within the first six months of the breach occurring rising to £3,000 after six months.
• Submission of false or misleading information for registration under the regulations or failure to comply with a compliance notice from the enforcing body will each attract a penalty of £600.

The maximum penalty currently allowed by the Energy Act 2011 is £5,000 but the Scottish Government is seeking to future proof its powers by amending the Energy Act 2011 to reserve the power to impose penalties under the MEES regulations of up to £30,000. The UK Government is seeking a similar power in respect of the English and Welsh MEES.

What is the timeline for implementation of MEES?

The proposed timeline is for the regulations to be laid before the Scottish Parliament and passed into law by early 2026. The regulations would then apply to any new residential tenancies granted from 1 April 2028 and to all privately rented homes (new and existing tenancies) from 2033. At the present time, the EPC reform is not complete and the new form of EPCs will not become effective until autumn 2026 at the earliest. This will leave private landlords with less than two years to get their properties up to standard for new tenancies or face voids in the future.

The consultation on the new MEES is open until 29 August 2025.