Potential Snags With The Green Deal

Although it's early days for the Green Deal and with a long lead in time there is the opportunity to address the practical issues, there are three major snags that already spring to mind:

1) Apparently the tenant can place an order for improvements under the Green Deal. Firstly this may breach the terms of their tenancy agreement and secondly, the landlord may not want some of these improvements. For example I deal with a private landlord with a large stock of early 20th century cavity walled houses. He does not want thse walls insulated as he is concerned about problems such as damp caused by insulating narrow cavities that may have rubble/debris.Can the landlord rely on The Green Deal provider, who is driven by the profit motive, to consider the long term 'health' of the property and what will happen if damage follows?

2) What are the legal implications for conveyancing and has this industry been consulted? - bearing in mind that there were concerns about the solar photovoltaic 'rent a roof' schemes.

3)As an incoming tenant or purchaser, if you receive an EPC for a property with a good rating because various energy efficiency improvements have been carried out, this may rightly make the property seem more attractive. However, if these improvements have been carried out under the Green Deal you will not actually get the full benefit as some of the 'savings' are going to repay the Green Deal loan. Effectievly, you could have two properties with identical EPC's but one (with improvements funded by the owner) will result in lower fuel bills for the new occupier than the other (funded by The Green Deal). How can you tell this when looking at the property or is it going to be obvious from the EPC? In that case, surely the whole EPC and not just the front sheet needs to be provided. If all the information is going to be on the new style EPC, surely all old EPC's will be obsolete as they will look completely different and be hard to compare?

I hope that everything will be thought through properly by launch or The Green Deal 'industry' may go the way of HIPs, Solar Photovoltaics, etc etc, bringing this governemt's green credentials further into doubt.

New EPC for April 2012 in readiness for Green Deal

The timetable for the latest revision of domestic EPCs, the Green Deal ready EPC, has now been set for completion on 1st April 2012. Although not fully agreed and confirmed, most of the required changes have now been set with the release of the full technical specification due early October 2011.

The most significant changes are driven by the Green Deal. The 2012 EPC must be capable of incorporating a range of potential Green Deal improvements and be able to identify the full range recommendations that may be eligible for Green Deal funding.

For current DEAs this means being able to recognise some additional features. There will be a new hierarchy of recommendations plus a new look and feel to the EPC – both are yet to be finalized.

Revisions are also being made to the National Occupational Standards (NOS) that define the role of the DEA. This together with the extent of changes to the RdSAP methodology dictate that some kind of top-up ‘exam’ will be required for all existing DEAs to retain their accreditation once the new software goes live.

Update on New regulations

I though it might be useful to answer some frequently asked questions about EPC regulations:

EPC validity:

Despite rumours to the contrary, the validity of an epc for sale or rent remains at 10 years. Many in the industry mistakenly thought that a sale EPC was valid for 3 years, based on the validity of the Home Information Pack. There was an amendment put forward to the Energy Bill, which is currently passing (very slowly) through Parliament to reduce this to 1 year, but the amendment has been withdrawn. It is quite possible that the EPC lifespan will be reduced in the near future, however this is unlikely to be impemented before the Energy bill provisions come into force (late 2012 at earliest estimate).

Holiday Lettings EPCs:

There was widespread alarm at the prospect of EPCs being required for all holiday lets within a short timescale and the capacity of the energy assessment industry to deal with these. The guidance has now been amended so that if the property is being occupied (let) for more than 4 months in any 12 month period, an EPC is required. This will apply to many but by no means all lets. The requirement does not include mobile homes.

Commercial EPC on new lease:

The guidance is a little vague here - an extension or renewal for a commercial property does not require an EPC, however a new agreement/new lease does. It is difficult to be sure where the boundary lies, however if there is a change in lease terms it would be wise to check. Commercial EPC prices have fallen significantly and the EPC is valid for 10 years, so it is probably better to be safe than sorry.

Changes to EPB Regulations from April 2012:

These are the delayed changes that were intended to be implemented in July and then October 2011. Despite the delays, CLG apparently still hasnt had enough time to provide a clear and precise document, although they have stated that interim guidance will follow.

It does seem highly likely that for residential properties the full EPC will need to be attached to written particulars, not just the asset rating (EPC graph) and that there will be a requirement to demonstrate that an EPC has been commissioned before marketing commences, rather than wait until the property is under offer. The implications of the first point are significant in terms of brochure production and also where EPC's are uploaded to internal/external websites. It would be prudent for agents to establish that their sofware and the websites they advertise on a re geared up for the change.