Green Deal

[Grampa]

The Green Deal is part of the Energy Act 2011 which came into effect on October 11^th 2011.

The aim of the Green Deal is to improve the energy efficiency of properties by removing the upfront costs of improvement and instead allowing the costs to be paid in instalments through energy bills.

A green deal plan is defined as an arrangement made by the occupier or owner of a property to make energy efficiency improvements to the property and those energy efficiency improvements are to be paid wholly or partly in instalments.

These improvements are based on the 'Golden Rule:

• The estimated annual saving must be equal to or greater than the expected annual repayments.

• The plans must not be for any length greater than the expected life of a particular improvement.

The payment instalments will be collected from the electricity bills and therefore the cost of the improvements is effectively a charge on the property payable by the bill payer and remains with the property and any subsequent bill payer.

There are three stages of implementation

Stage 1: introduced on 28^th January 2013 - See below

Stage 2: this is due to be implemented no later than April 2016.

When this is implemented (under Section 46 of the Act) landlords will not be able to 'unreasonably' refuse a request for a Green Deal improvement where such improvements are fully funded by the green deal. If the landlord wants to avoid a charge on the property he would need to meet the costs himself.

Stage 3: this is due to be implemented no later than April 2018

When this stage is implemented landlords will no longer be able to rent out properties that are lower than a set EPC rating. This rating is at present not decided but the suggestion is that the minimum rating will be set at Rating E.

The current situation under Stage 1

A Green Deal Assessor will carry out an inspection of the property being proposed for improvement (making allowances for the way in which the current occupiers use the property) and will make recommendations as to the most suitable option. These recommendations will be consistent with the principles of the Golden Rule.

A Green Deal Plan will be drawn up which is a contract setting out what work will be done and how much it will cost. Once it has been signed the Green Deal Provider will arrange for a Green Deal installer to carry out the contracted work.

Before any plan can be entered into written consent must be obtained from involved parties.

The 'improver' is defined as the person who instigates the plan

• If the improver is the tenant he must gain consent from the owner(s) of the property
• If the improver is the landlord he must gain consent from the tenant (who is likely to be the bill payer).

The cost will be payable in instalments through energy bills.

Repayment

Instalments due are to be made by the person who is for the time being liable to pay the energy bills for the property. This is usually deemed to be the occupier but could be the landlord if the rent includes bills. Where there is no occupier the deemed contract is between the owner and the energy supplier

Obligations on Agent, Landlord and Seller

Disclosure

As soon as practicable after the improvement has been installed the Green Deal Provider must produce an EPC which reflects the fact that the property is now subject to a green deal plan.

This information must be provided by a prospective landlord/seller to any prospective tenant/buyer free of charge. A prospective tenant/ buyer is:

• someone who requests any information about the property for the purpose of deciding whether to rent or buy it
• someone who makes a request to view a property or
• someone who makes an offer on a property, which can be oral or written

The EPC must be provided to a prospective tenant at the time of or before viewing the property

An agent may provide the information in place of a landlord

Sanctions for failure to disclose:

• The liability of the bill payer and any subsequent bill payer will be cancelled as from the date of the breach and any payments already made since that breach will be refunded.
• In addition, compensation may be imposed upon the landlord or agent of a sum equal to the cost which the Green Deal Provider had incurred as a result of his indebtedness.

In other words, the Green Deal Plan will be cancelled and refunded and the landlord may be ordered to repay any losses incurred by the Green Deal Provider.

Acknowledgement

Where a property subject to a Green Deal is being let (and on the basis that the prospective tenant or licensee would be liable for the bill) the prospective landlord must ensure that the tenancy includes an acknowledgement by the tenant that the bill payer is liable to make payments under the Green Deal Plan. This acknowledgement must be in the same (or substantially the same form) as prescribed in the Green Deal (Acknowledgement) Regulations 2012. It must be placed in a prominent position within the tenancy agreement.

There are two forms of acknowledgment: one where the plan contains an early repayment option and one where it does not.

Sanctions

Essentially the same as the sanctions for failure to disclose.

Additional Liabilities

Both letting and sale agents must also be aware that as well as the requirements for disclosure and acknowledgement (above) there will also be liabilities under the Consumer Protection from Unfair Trading Regulations 2008 to make known to any prospective tenant or buyer of the existence of a Green Deal contract on a property. In certain instances it is possible that these liabilities may precede any liabilities under the green deal legislation.

[Richlist]

.........and what about leasehold property ? No mention of the fact that niether the tenant the landlord or the leaseholder is authorised to give permidsion for aterations to the property such as cavity wall or loft insulation.

[Grampa]

There is still some ironing out to be done on the small print I guess.

[Melboy]

Yawn!

No mention of the 7% interest rate on the loan then?

£110 to have the Green Deal Assessor round prior to any application.

Up until January31st just 5 people had applied for this Green Deal.......no surprise there then.

SNAFU !

Incidently Warm Space Ltd a large company around here for cavity wall insulation and roof insulation had been going very well under the pre January 2013 arrangements.

They have just laid off 25 staff due to no customers and are on the verge of going under.

[Mrs Tara Plumbing]

Similarly for heating companies - word in the trade it that it is too much paperwork and onerous for most small business to get involved with - not to mention upfront costs for setting up.

So it is likely to be o]nly t

]#he very big installers - like British Gas - who may be able to install under this programme.

So as a customer it may difficult to shop around and get a lower price.

[Grampa]

Who needs the green deal anyway.

I have a flat with electric heating and a tenant on HB.

My council have a grant availible (for HB tenants) up to 6k so I am getting a gas central heating system fitted for free. It doesnt cover for digging up the road and bringing gas to the property which is is 900 quid but when that quote was sent through I was also sent details of another grant for that also. So the whole lot for free and no restrictions after fitting so if the tenant leaves (or i give notice) and I decide to sell the property I'm quids in.

Also a friend of mine has just been told the boiler needs replacing at his rented property with a HB tenant and he was about to put his hand in his pocket to buy a new one for £1700 and I have managed to get it paid by this grant.

Anyone would think this goverment has too much money.

[Melboy]

Who needs the green deal anyway.

I have a flat with electric heating and a tenant on HB.

My council have a grant availible (for HB tenants) up to 6k

I wonder if that grant applies to double glazing as well?

[Grampa]

I wonder if that grant applies to double glazing as well?

yes it does and insulation, but this grant and I am not sure if it is nationwide expires end of March so you have to get your 2 quotes in a bit sharpish.