Landlords – don’t ignore ‘the Green Deal’

Tue 3rd Jul 2012

Launching later this year, ‘The Green Deal’ is the Governments new scheme to improve energy efficiency in residential and commercial buildings.

The concept of ‘The Green Deal’ scheme is to give a financial scheme which eliminates the need to pay upfront for energy efficiency measures, but instead balances the cost of measures by savings on the properties electricity bill.

To get involved in the scheme a Landlord’s can approach a ‘Green Deal Supplier’ and request a Green Deal package on their property. An assessment is then made on the property of recommended measures and the landlord then decides which improvements to take out. The ‘Green Deal; Supplier’ then arranges for improvements to be fitted and pays for the work upfront. Although the cost of the work is initially paid upfront, it is then attached to the electricity bill for the property. This addition is know as ‘the Green Deal Charge’. Whoever pays the electricity bill then pays ‘the Green Deal Charge’.

There is much debate as to whether it is fair for Tenants to pay back the charge when it is improving the Landlords property. However the Government argue that the principle of the scheme is that, when combining the cost of the Green deal loan and the new reduced cost of utility bills, the total payable must be lower than if the Green Deal had not been carried out.

In a recent article by the National Landlords Association, it was pointed out whilst savings on utility bills may not be noticeable at the start for Tenants paying the bills, when energy bills inevitably rise Tenants could be seeing significant savings.

The scheme should not only be seen as good news for Tenants, who will also see the physical benefits of the improvements, but also Landlords should reap the benefits. Not only is their property improved physically, but as a result ongoing maintenance costs should be reduced as well as void periods reducing with contented Tenants.

Regarding the technicalities of the Charge itself, the proposals are for it to be attached to the utility meter of the Property. It therefore moves to any new utility companys appointed for the property and ultimately transfers to the new property owner if the property is sold by the Landlord.

Act Now

Although initially the scheme will be voluntary, there are future looming changes to policy which mean that it is in the benefit of the Landlord to deal with matters sooner rather than later. For example, from 2016 Landlords cannot unreasonably refuse a Tenants request to improve energy efficiency of their properties.

Furthermore, in a sting in the tail, from April 2018 the Government will make it unlawful to let a property which has an Energy Efficiency rating of F or G. Surely Landlords should act now to take advantage of the scheme, before the tough measures are brought in.

For more information on the Green Deal and any other issues relating to Landlord and Tenant, contact Jo Morgan who heads our Buy to Let team. Telephone 01726 874700 or email jo.morgan@coodes.co.uk

Tue 3rd Jul 2012

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