This entry is part 11 of 13 in the series Green Deal

Landlord and Agent Duties

Owners, landlords and their agents must follow strict disclosure and acknowledgement rules in relation to any property that has a green deal plan attached.

Written tenancy agreements

Where a green deal property is to be let out, under a tenancy or licence agreement which is in writing, and on the basis that the prospective tenant or licensee is to be liable for paying the energy bills for the property, the prospective landlord or licensor must secure that the contract for the tenancy or licence agreement includes an acknowledgment by the tenant or licensee that the bill payer at the property is liable to make payments under the green deal plan and that certain terms of that plan are binding on the bill payer [27].

The acknowledgment must be in the prescribed form (or substantially the same form) as shown in [The Green Deal (Acknowledgment) Regulations 2012]. The acknowledgment wording must be placed in a prominent position within the contract [28].

Oral tenancy

If a prospective landlord intends to enter into a tenancy or licence with a prospective tenant which is not intended to be in writing and

  • The prospective tenant will start to occupy the property within six months of the agreement being entered into; and

  • The prospective tenant will be the bill payer at the property whilst in that occupation; and

  • Consent concerning a green deal plan was not previously obtained from the prospective tenant.

Then, the prospective landlord must secure that the prospective tenant acknowledges in writing that, as the bill payer at the property, s/he will be liable to pay green deal instalments and bound by the terms of the green deal plan which bind a bill payer. The acknowledgment must be given before the prospective tenant starts to occupy the property under the tenancy or licence agreement [29].

Agreement to agree

Under rare circumstances, it is possible that no tenancy is drawn up in the first instance and instead, the parties (potential landlord and potential tenant) intend to agree their intention to draw up a tenancy agreement sometime in the future (I suppose this might be used where a house is yet to be built for example).

Where a potential landlord (or licensor) intends that a transaction or arrangement is to be entered into under which a potential tenant (or licensee) is to have a right to occupy the property and that arrangement is not a contract for a tenancy (or licence), nor is the arrangement a transfer of ownership and, it is intended the arrangement will be made in writing and it is intended the potential tenant will occupy the property within three years of the arrangement and will be the bill payer when occupying, then, the potential landlord must ensure that s/he secures in writing from the potential tenant that, as bill payer they will be liable to pay green deal instalments and bound by the terms of the green deal plan which bind a bill payer.

The requirement to secure the acknowledgment in writing must be satisfied as soon as practicable before the transaction or arrangement is to be entered into [30].

Transactions or arrangements to change bill payers

Where a current bill payer intends that there is to be a transaction or arrangement under which the current energy bill payer agrees with another person that they are to become the bill payer at the property and the intended transaction or arrangement is not to be a contract for a tenancy (whether to be in writing or oral), nor an agreement to agree nor an intended transfer of ownership, then, the current bill payer must ensure that s/he secures that the prospective bill payer acknowledges in writing that as bill payer they will be liable to pay green deal instalments and bound by the terms of the green deal plan which bind a bill payer.

The requirement to secure the acknowledgment in writing must be satisfied as soon as practicable before the transaction or arrangement is to be entered into [31].

Sanctions for failing to provide acknowledgement

Where an acknowledgement has not been provided, the sanctions are in essence the same as for a failure to disclose the EPC disclosure document i.e. the green deal plan will be cancelled and refunded by the green deal provider and the landlord may be ordered to repay any losses incurred by the green deal provider as a result of the cancellation.

The reason for these potentially costly compensation amounts for both the disclosure and acknowledgment provisions is because if for example a tenant views a property with double glazing, new condensing boiler and new loft insulation, they may quite reasonably assume that the energy bills will be quite cheap compared to other properties they may have viewed. However, if the property has green deal associated with it, the prospective tenant will not experience the cheap bills because they will be liable to pay the green deal instalments on top of the energy bills so although it won’t be costing more than before the cost of the improvements, a new tenant won’t experience the benefits of the improvements in a financial sense until the green deal plan has been cleared.

  • [27] Section 14 Energy Act 2011  ↩

  • [Regulation 3 & 4 (2)(b) [28] The Green Deal (Acknowledgment) Regulations 2012  ↩

  • [29] Regulations 47 & 48 The Green Deal Framework (Disclosure, Acknowledgment, Redress etc.) Regulations 2012  ↩

  • [30] Regulation 43 & 44 The Green Deal Framework (Disclosure, Acknowledgment, Redress etc.) Regulations 2012  ↩

  • [31] Regulation 49 & 50 The Green Deal Framework (Disclosure, Acknowledgment, Redress etc.) Regulations 2012  ↩

  • Series Navigation<< Green Deal Disclosure Requirements||Green Deal Forms of Acknowledgment >>

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