The 'Green Deal' initiative came into force on 28 January 2013, in order to promote the energy efficiency of commercial and domestic properties in the UK.
What is a Green Deal?
A Green Deal enables an owner to make energy-saving improvements - such as fitting double glazing or installing solar panels - without having to meet a large financial outlay upfront. Provided the owner passes an individual assessment, he/she can repay the installation costs of all qualifying measures by way of a supplement to their electricity bill over a period of up to 25 years.
It is important to note that repayments do not attach to the property itself. Instead they attach to the person who is liable for the energy bills of the property - be it the landlord or tenant, and it is crucial to check the terms of your lease/sale as you may be liable for the repayment fees.
Buying and Renting with a Green Deal in Place
Under section 12 of the Energy Act 2011, an existing Green Deal must be disclosed in a sale or lease of a property. Therefore, before a transaction completes, a seller or landlord should provide an Energy Performance Certificate free of charge detailing the key facts of the Green Deal. A prudent seller/landlord should obtain written confirmation from the purchaser or tenant agreeing to be bound by any green deal charges.
Prospective purchasers and tenants should exercise caution as such a disclosure may not be forthcoming from a seller or landlord. Whilst compensation will be available to the new owner/tenant for up to 90 days after the first statement has been received, they will have no recourse, and no alternative but to pay the additional charge when this period of grace expires.
Importance of Checking for Green Deals
Official figures show that over 9,300 Green Deal property assessments had been completed by the end of April this year, and this number is growing fast. It is crucial that you are aware of Green Deals that may already be in place, when buying or renting a property. Prospective purchasers and tenants should not only inspect the Energy Performance Certificate with care to ensure the property is not subject to a Green Deal, but also obtain an appropriate warranty from the seller/landlord. Those who do not exercise caution here may find themselves with an unexpected addition to their electricity bill for a substantial period of time.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
