The Green Deal uncovered

In recent years, there has been continual emphasis on environmental ratings of buildings and their contribution to the carbon footprint of the nation.

The Green Deal is a Government initiative that is set to help landlords, tenants and all property owners in the UK to improve energy efficiencies and bring properties up to new standards set out in the Energy Act 2011.

The Green Deal implementation started in October this year, but will become more prevalent in 2013. Here are the five things landlords and tenants need to know:

* It’s about energy efficiency in the home

The Green Deal ensures that upfront costs for landlords are kept to a minimum by adding any improvement costs onto the energy bills of the tenant, or landlord during void periods. The Department of Energy and Climate Change (DECC) are committed to ensuring that any cost will be outweighed by the energy efficiencies gained by adopting the Green Deal scheme.

* Tenants and landlords must agree to the measures upfront

Each party would need to be aware that the property was going to adopt the Green Deal scheme. The tenant would need to be aware of the extra cost and the landlord would have to give consent if the tenant was going to apply for the Green Deal. As the scheme is mutually beneficial to both parties – the tenant would directly feel the impact of energy efficient improvements within their home. Property owners would benefit in future marketability of their property and improved energy ratings.

* It’s open to everyone

The Green Deal is applicable for all property owners in the UK and therefore all landlords.

* Private rental sector is the biggest focus

The overall aim is to improve the energy efficient standards of properties in the UK to reduce the carbon footprint of the whole nation. The private rented sector has the largest percentage of properties falling low in energy performance and the Government is implementing the Green Deal to combat these issues.

* The legal implications

From April 2016, landlords will not be able to refuse tenants the right to make improvements to the energy efficiency of the property due to the Green Deal’s financial backing.

From April 2018, all domestic rental properties will need to either achieve grade ‘E’ on Energy Performance, or have carried out the maximum package of measures funded by the Green Deal. Consequently, landlords will receive a fine of up to £5,000 for not meeting the minimum standards after this date.

The Green Deal Scheme is a working progress, and its validity can only be reviewed after implementation over a substantial period of time. However, property owners must be aware of the imminent changes in order to prepare throughout 2013.