SLC guidance on the Green Deal
Under the Governments Green Deal home owners and tenants are able to borrow money in order to make environmental improvements to their properties.
The measures must pay for themselves in the economic lifetime of the measure, with the loan repayable via their electricity bills.
The cost of these improvements will remain with the property even if the people taking the Green Deal sell the property.
Mike Ockenden, of the SLC explained what the process will mean for conveyancers: “There is effectively no charge in terms of security on the property in respect of the Green Deal. There is no record at the Land Registry.
“But there is an obligation that says the person that the bill payer at the property must pay for the loan.
“If you are becoming a new tenant or purchasing a property where a Green Deal exists then by buying the property you will become obligated to pay back the loan through your energy bill, regardless of whether you change providers.”
Mr Ockenden explained that the only way you would know about the obligation is through the register of Energy Performance Certificates (EPC) where the existence of the deal would be notated at the bottom of page one.
If a deal is in place then the fifth page of the EPC will provide further details.
But what impact will this have?
Mr Ockenden added: “It’s our belief that consumers won’t purchase a property with an outstanding loan agreement on it. They would expect the vendor to pay it off.
“The concern is making sure any perspective buyers know about the deal and the vendors understand the obligation they have to disclose the existence of the deal.
“Whilst the logic in the Civil Service says of course you would know, I can think of many circumstances where it wouldn’t be the first thing on your mind if you are selling your property.”
Mr Ockenden explained that DECC are producing a “Property Practitioners Guide” to the Green Deal which will basically set out what is in statute and what the obligations are.
He explained that in order for lawyers to discharge their responsibilities to their clients and not to be found negligent they will have to identify if there is a Green Deal.
He said that procuring page one of the EPC will become a standard part of the process.
The guidance the SLC will be issuing to its members will say that when representing the vendor they should also get page one of the EPC.
How big an impact will this have on the process?
Mr Ockenden said: “The EPC can be viewed online without charge, although obviously there is a process cost involved. I imagine many conveyancers will let the search provider get this for them as part of the standard set of searches they apply for.
“If there is a Green Deal then you enter into the whole issue of advising on it. “I think the purchasers will just ask for the loan to be paid off.”