Are school buildings up to the new standard for leases?
The first stage of the Minimum Energy Efficiency Standard came into force in April 2018, affecting schools that act as landlords for their properties.
The first stage in the implementation of the Minimum Energy Efficiency Standard (MEES) came into force in April 2018. Wrigleys produced a general guide for clients who let properties which can be found here and, although schools do not often see themselves as landlords, they do sometimes end up in that position.
If schools are letting any properties, then they need to bear MEES in mind. Common examples where MEES could apply is where people are occupying caretaker's cottages or other housing stock, or outside businesses are providing nursery and/or breakfast club and/or after school services in properties owned by a school. If a school has inherited a children's centre or scout hut, or sub-lets part of its school back to the local authority or another entity then this may also fall within the ambit of MEES. Portacabin-style buildings are particularly vulnerable to falling foul of MEES.
Academy lease and long lease exception
One important exception is the leases for over 99 years do not fall within MEES so schools do not need to worry about any leases that have a really long term. This also means that the DfE template lease of a school from the local authority to an academy trust will not be caught by MEES.
What schools should be doing now
If schools are concerned that any buildings that they are letting are not up to scratch, then they should arrange for an EPC to be produced and consider its recommendations. If the building does not meet the standard of E or above, then schools cannot grant any new lease until that building meets the required standard. Schools should also be considering existing lettings – they have until 1 April 2020 to ensure existing residential lettings meet the required standard and until 1 April 2023 to ensure commercial lettings do the same.
If schools own buildings subject to an existing lease that will not reach an E rating, then they need to be reviewing the terms of that lease. Will the existing term end before 1 April 2020 for residential leases or before 1 April 2023 for commercial lettings? If so, will this give schools the opportunity to upgrade the building and will they have funds to be able to do so? If the term will not end before those dates, can schools bring the lease to an end anyway or do they gave the powers (and money) to undertake the necessary works whilst the tenant is still in occupation?
Schools that are converting to academies or academy trusts that are taking on new schools should add obtaining an EPC to their list of tasks prior to conversion/transfer of the school. This will allow them to assess whether MEES will apply to lettings in any relevant building.
How we can help
Wrigleys can help schools review the terms of existing leases where schools are looking to terminate a lease or carry out any works, to ensure that they do not inadvertently breach the requirements of MEES.
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The information in this article is necessarily of a general nature. Specific advice should be sought for specific situations. If you have any queries or need any legal advice please feel free to contact Wrigleys Solicitors.