Terms and Conditions and Estimates
Consider changing your Terms and Conditions to cater for the Green Deal. First, make it clear that the obligation rests the seller to disclose whether a Green Deal as applicable to the property. Set out the legal obligations of disclose and the implications of failure. If you have an instruction form add a question as to whether the property is subject to a Green Deal. As the conveyancing will inevitably be more complex where there is a Green Deal do consider whether you want to reserve the right to charge additional fees. If you have an on-line fee calculator perhaps you can ask the appropriate question and therefore disclose your additional fee
Acting for Sellers
Sellers of properties subject to the Green Deal will be under a duty to disclose the scheme to prospective buyers at least seven days before exchange of contracts and to secure the acknowledgement of the buyer or tenant that they will be bound by the plan.The responsibility for communicating that information rests with the seller or landlord. Agents can fulfil that role; however they are not liable for the responsibility. The buyer will then be required to formally acknowledge that the Deal has been disclosed to them and that they will be bound by the terms of the agreement made between the Buyer and the Green Deal Provider.
If the seller (being the original bill payer) fails to give necessary disclosure they may have to repay the value of the loan (and interest). The purchaser or tenant (if they have not received the necessary disclosure) may challenge the obligation to repay the loan. They must do so within 90 days of notification by the energy provider that the Green Deal affects the property. This action by the purchaser would leave the debt with the outgoing seller.
Acting for the Buyer
Precedent documents will need to be amended to reflect the changes, in particular the Contract for Sale, Reports on Title, Lease and License, and advice will need to be provided to buyers in understanding the terms of the Green Deal as part of the usual title investigations.
Whilst it important to make sure that the investigative work about any Green Deal is covered I would include a paragraph (as a fallback position) within the ROT making sure that the buyer gets in touch with you if they receive any bill one they move in which indicates a Green Deal being in place - point to the fact that there is a 90 day limitation period to push the debt back to the seller. I would not consider it overkill in your letter confirming completion to reiterate the necessity to check the utility bills and reinforcing the 90 day limitation period (obviously such paragraphs should be deleted if the where the Green Deal has been identified as part of the conveyancing process).
The ROT should also set out the disclosure obligations should the buyer decide to let out the property.
As a buyer’s conveyancer you need to ensure that your client understands the terms of the agreement, but you will also want confirmation that all appropriate building regulations and, in certain circumstances, planning obligations have been fulfilled by the scheme provider as required under the Deal. For certain properties restrictive covenant consent or the a license for alteration from a landlord or freeholder may also have been needed. Please also note that if part of the work involves a lease of the roof for solar panels there will be CML handbook requirements to consider.
If you would like to see precedent wording to go in your Terms and Conditions, Reports, Sale Contract and other appropriate documents please contact me.