The European Commission’s guidance on the implementation of the Energy Efficiency Directive (which requires heat meters or heat cost allocators to be installed) in multi-occupied buildings, underpins the drive for greater efficiency and understanding of usage of energy in such buildings by advising on how to determine which buildings may be exempt from the Directive. The Directive makes installation of such meters compulsory unless installation is technically infeasible or not cost-effective.  

Heat meters or heat cost allocators are useful as these enable more accurate billing of occupiers, and can help with overall energy efficiency of such buildings. It is anticipated that this will be a fairer method of billing for energy consumption than by more traditional ways such as apportionment by the floor area by each occupier, but to what cost and who will ultimately pay the price? Can such costs be recoverable from tenants? 

The cost of installing these meters is not yet known, as we do not yet have a clear understanding of which buildings will be subject to the Directive, and as such the UK Government has delayed implementation of the Directive until it can consult on the matter, which is due to happen in the early part of this year.

Landlords of multiple-occupancy buildings should consider how these impending changes may affect their properties, and factor in additional costs in future property management strategies. However, as we do not yet know which buildings will fall under the Directive, advice should be sought about such requirements.