angus Macrae Partner, Commercial Property Group Semple Fraser LLP e: angus.macrae @semplefraser.co.uk t: 0131 273 3771 We're about to buy new an office building to house some of our staff. Do we need to think about the Green Deal? The Green Deal was introduced by the Energy Act 2011. It's a funding mechanism for energy efficient improvements. Works are carried out by a Green Deal installer and paid for by the energy bill payer via instalment charges on its energy bill.
Any owner or occupier can use a Green Deal finance plan. However, a Green Deal Plan (GDP) can only be put in place if the cost of the works will not exceed the anticipated energy savings - the "golden rule".
Payments attach to the energy bill, rather than the person or property - and so they'll automatically be payable by successor bill payers, provided the GDP was disclosed to the successors before they bought and they properly acknowledged it. Any arrears are recoverable from the bill payer on whose bill the relevant instalment appeared - they aren't recoverable from any successor bill payer.
So you should ask the seller if there is any GDP in place before committing to the purchase. And if the seller doesn't give you sufficient information before the purchase/sale contract is tied up, you should seek a warranty from the seller that the property isn't subject to any GDP.
Lastly, it's worth noting that the existence of a GDP doesn't stop the bill payer from changing utility supplier. Also, be aware that if the energy supply is permanently disconnected (e.g. on demolition for a redevelopment) this triggers an obligation, on the person who was the bill payer at the time of removal, to pay the whole outstanding balance due under the GDP.
Semple Fraser specialises in certain industry sectors - real estate, construction & engineering, finance, renewables & energy, and waste - advising clients throughout the UK from its offices in Glasgow, Edinburgh and Manchester.
www.semplefraser.co.uk March 2013 INSIDER 71