The Green Deal, which came into force on 28 January 2013, is a government based initiative designed to reduce carbon emissions and save energy. The idea is that if residential properties are better insulated, and have other energy efficiency improvements made to them, energy demands will be reduced.
It allows property owners to pay for energy improvement measures with no up- front payment. This means that installers will carry out the appropriate measures, e.g. cavity wall insulation, etc at their own cost. The householder then repays the cost over many years, using the money they have saved through their reduced energy bills.
The payments will contain 2 parts, namely the fuel consumption, as now, and then the Green Deal payment.
What work qualifies for the scheme?
A few examples of works which would qualify for the Green Deal include:
- Cavity wall insulation
- Solar panels
- Hot water systems
- Replacement glazing
- Lighting systems
If you take out a Green Deal Plan for your property then you will need to make sure that all the appropriate consents are obtained for the works. This includes Building Regulation Approval (e.g. for cavity wall insulation), FENSA certificates for replacement windows, and, if you live in a flat, landlord’s consent.
Selling your property
If you decide to sell your property, then it is your duty as a seller to make sure that you tell any prospective buyers that the property is subject to a Green Deal plan. The easiest way to do this is by making sure that you have an up to date Energy Performance Certificate (EPC) for your property and that this is given to all people who come to view your property. Your estate agent will advise you about this when you put your property on the market.
The responsibility for repaying the Green Deal stays with the property. Therefore, assuming that you have taken all the correct steps to disclose the Green Deal plan, your buyer will take over the repayments on completion of your sale.
However, your buyer may ask you to repay the whole loan in full on completion of the sale. If this is the case, you may need to negotiate this through the conveyancers.
Buying a property
If you are buying a property which is subject to a Green Deal plan, you will formally have to agree to take on the repayments, so need to ensure you budget for this.
If you are taking out a mortgage, your mortgage lender will need to be made aware that the plan exists.
Your conveyancer will advise you of the implications of the plan and will check that everything has been carried out appropriately.
If your seller does not disclose the existence of a Green Deal plan, and you subsequently receive a utility bill which charges you for a Green Deal payment, you can challenge the obligation to pay it and if you are successful, the seller will have to make payment in full.