The government formally launched the Green Deal scheme on Monday 28 January 2013 following its inception last October. Its aim is to improve the energy efficiency of the property stock in the UK.
The scheme enables homeowners and others to take out long-term loans to fund energy-efficient home improvement projects such as the installation of loft insulation, solar panels and new boilers. The loan is paid back through the electricity bills for a period of up to 25 years.
The Green Deal's 'golden rule' is that the loan repayments should be lower than the anticipated savings in energy costs. However, this may not always be the case because different occupiers will use different amounts of fuel.
The debt is effectively attached to the electricity supply of the property. It is not a legal charge and it is not the personal obligation of the person commissioning the works. If they move the 'benefits' and the debt stay with the property.
This means that there will be additional steps to be taken if a property is being sold and purchased subject to a Green Deal.
The main impact for conveyancing solicitors will arise on the transfer and/or charge of a property when the property has installations that have been financed under the scheme.
The sellers must inform potential buyers if a property has a Green Deal. The buyer must consent to take on Green Deal repayments and make the repayments on the loan.
Details of Green Deal improvements will be included on a property's Energy Performance Certificate (EPC). This will include details about the energy efficiency improvements that have been made and the repayment costs of the loan. It will be possible to view the relevant part of the EPC online without cost.