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The Green Deal

Posted on 4 March 2013

We provide an overeview of the Green Deal, the new government scheme set up to help property owners improve the energy efficiency of their proerties. 
What is the Green Deal?

The Green Deal is the new government scheme to help property owners improve the energy efficiency of their properties. From January 2013, owners of private property will be able to install various types of energy efficient measures with no up front costs. The costs of the works will be paid back through the energy bills over a period of time.

A Green Deal assessor will recommend energy efficient measures for the property. A Green Deal plan will then be written up setting out the work that will be done and the repayments to be made. Once a Green Deal plan has been agreed a Green Deal provider will arrange for a Green Deal installer to install the measures at the property.

The “golden rule” is the repayments attached to the energy bill should not be greater than the predicted value of the energy they save. In other words, the improvements should pay for themselves through the resulting savings on the energy bills.

How will a buyer or tenant know whether a property is subject to a Green Deal plan?

When a property is sold or rented (or a license to occupy is issued) details of any Green Deal plan must be disclosed to prospective buyers or tenants.  An Energy Performance Certificate (EPC) will need to be provided showing: any improvements made, the repayment amounts, how long repayments need to be made for and the name of the Green Deal provider.

The seller or prospective landlord will need to obtain a written acknowledgement from the prospective buyer or tenant showing that they are aware of the repayments and are liable to make those repayments and they understand they are bound by the terms of the Green Deal plan. It is therefore likely that an acknowledgement will be included contracts for sale or the lease or licence agreements.

Who is responsible for making the repayments?

The person responsible for paying the energy bills makes the repayments for the improvements. When the bill payer moves out of the property the responsibility to make repayments will pass to the new bill payer so the bill will remain with the property where the savings are occurring. Should a rented property be left vacant, the landlord will need to make the repayments until such time as a new tenant occupies the property and pays the energy bills.

Key information for Landlords and Tenants:
  • Landlords who wish to take out a Green Deal plan at a property with existing tenants will require the permission of those tenants as it is the tenant that will be making the repayments as the energy bill payer. It is important to note that tenants will also require the permission of the landlord to takeout a Green Deal plan at a property they rent.
  • From April 2016 private residential landlords will be unable to unreasonably refuse a tenant’s request for consent to making energy efficient improvements and a tenant will be able to apply to the local county court if its landlord refuses to give their consent. If the landlord is found to have failed to comply with legislation a maximum financial penalty will be able to be awarded of up to £5,000. This restriction will not apply to landlords of private non-residential properties.
  • From April 2018, all properties will be required to have both an up-to-date EPC and an energy efficiency rating of E or above to be rented since it will be unlawful to rent out a property which has less than an E rating.

Pardoes Property Litigation team can advise Landlords, Tenants and Agents on the different options available when dealing with a request by a tenant for energy efficient improvements.   For a free initial telephone conversation contact Sarah Doble, Property Litigation expert on 01935 382689.

Posted in: Landlord & Tenant/Housing, Lettings/Landlord & Tenant