Following the Energy Act 2011, a new government initiative known as the Green Deal is due to become active on 1 October 2012. This is designed to install new green technology into homes without the owner having to pay an upfront cost. Instead, the costs are paid back through your energy bill over a period of time. There are a whole range of improvements that can be claimed, including double glazing; cavity wall and loft insulation; gas and oil boilers; and renewable technologies such as solar PV, solar thermal and heat pumps.
In order to take advantage of the scheme, homeowners must first approach an installer with Green Deal Provider status and a Green Deal Assessor will then survey the home and provide a report on the home's current performance and potential improvements. Provided the expected energy savings outweigh the cost of any improvements, a loan is given and the work completed. However, this is unlike a conventional loan, as the debt remains with the property on the energy bill rather than with the customer.
So what does this mean for a conveyancer? When a property with a Green Deal is sold or rented, the person considering taking over the property should be informed about the Green Deal and what it means for him or her. The Conveyancing module of the Legal Secretaries Diploma and the Conveyancing Foundation and Advanced Courses mention that before a property can be marketed for sale, it must have an Energy Performance Certificate (EPC), as it is an existing requirement of the Energy Performance of Building Regulations which implements a European Directive. Usually an estate agent will arrange for the EPC to be put in place. The EPC has to be amended so that it discloses any Green Deal on the property. Solicitors will therefore engage with the Green Deal through their work representing clients in their property dealings including sales, lettings and licenses. Therefore, precedent documents will need to be amended to reflect the changes, in particular the Contract for Sale, Lease and Licence, and advice will need to be provided to buyers in understanding the terms of the Green Deal as part of the usual title investigations. A surveyor may also pick up on this as part of a survey of the property.
It is important that conveyancers provide the correct advice regarding a Green Deal scheme to a buyer, as a new owner or tenant will become responsible for paying the Green Deal charge as part of the electricity bill and this could affect their decision as to whether to take on the property.
As a Legal Secretary, part of your role in a Conveyancing department may be to take initial instructions from a client or to provide conveyancing quotations. Conveyancers will need to provide advice, as there may be an additional cost to the client in respect of their legal fees. You may also start receiving calls from clients asking for advice as to how a Green Deal will affect the title of their property. Although, you are unlikely to come across a property with a Green Deal on it for a while, particularly given that the Department for Energy and Climate Change (DECC) has stated that the first Green Deal plans will not be confirmed until January 2013 and only Green Deal Assessments performed by Green Deal Advisors will take place from 1 October 2012.
Next month we will be looking at solar panel leases, another renewable energy trend which conveyancers must now be aware of.