FPRA: The Impact of The Green Deal on Blocks of Flats
The Federation of Private Residents’ Associations have long been campaigning for the Department of Energy and Climate Change to ensure that the Green Deal doesn’t exclude leaseholders as they believe current policy discriminates against around two million leasehold flat-dwellers. This is because of legislative conflicts and because leases make no provisions for “improvements”.
The legislation that provides for energy improvement grants also don’t include communal arrangements, focusing as they do on individuals purchasing in their own names. This means it’s not possible for flat owners to take most of the steps that a freehold house owner can. There is also the fact that when it comes to such measures as cavity wall insulation, the structure of blocks of flats belong to the freeholder, not individual leaseholders.
It is also proposed that the Green Deal will grant renting tenants the right to to ask their landlords to make their home greener, with local authorities backing up their demands. If a landlord refuses to make improvements to the property, they could be fined by councils keen to meet energy efficiency targets.
In an article on the Property Network site in 2010,entitled ‘Will The Coalition’s Green Deal Really Benefit Leaseholders?’ Chairman of the Association, Mr Bob Smytherman said “that if Government worked with the Department of Communities and Local Government (Leasehold Reform Branch) and made a few simple changes to leasehold legislation, existing blocks of flats could be made as energy efficient as those flats built today”.
The article goes on to say that the Federation believes that the simple changes to leasehold legislation require s35 of the Landlord and Tenant Act 1987 to be amended to provide that where a lease makes no adequate provision for the reasonable insulation of a property, it should be grounds for it to be varied. As s35(2)(g) of the LTA 1987 (added by 162(3) of the Commonhold and Leasehold Reform Act 2002) already makes provision for additional grounds for variation of leases to be added to s35 by Regulation, primary legislation would not be required, only a Statutory Instrument. An express provision in the lease for “reasonable” insulation would automatically mean that if there were any dispute as to whether the measures proposed were reasonable, a further application could be made to the Leasehold Valuation Tribunal under s19 or s27a of the Landlord and Tenant Act1 985 for resolution.
The Campaign Is Recognised
The Housing Minister Mr Grant Shapps has recognised the Federation’s campaign and agrees that the energy efficiency of flats will only be improved if there is a mechanism that provides for improvements to be carried out with no upfront cost to leaseholders, tenants and freeholders. However he goes on to say that an important consideration is whether this mechanism would mean imposing costs on leaseholders “above and beyond those that could be met from reductions in energy bills”.
Further Amendments To The Bill
The Association are also calling for further amendments to the Bill to include the Private Rental Sector:
- The start date of the minimum energy efficiency standard brought forward to 2016 in line with the legal target to end fuel poverty, rather than 2018, with the minimum standard rising over time to Band D by 2020;
- Include protection from retaliatory eviction for tenants using their new right to make energy efficiency demands of landlords.
- Create a register of landlords. This should be used to give them better access to information about the minimum standard, the Green Deal and other help with improving their property.
- The Energy Bill should clearly establish the minimum standard as energy efficiency Band E from 2016 for private rented properties;
- Make it a criminal offence for landlords and letting agents to market properties to let below the minimum standard;
- The regulations apply the first time a property is let after they come into force;
- Allow local authorities to carry out energy efficiency improvements to a rented property that fails the minimum standard because the landlord has ignored requests to do so, as an alternative to a fine.
- Bring forward legislation to stop landlords unreasonably refusing energy efficiency requests from local authorities or tenants to start in 2014, not 2016.
In fact, John Leech MP has tabled a number of amendments to the Bill which can be read here.
A couple of years ago the Energy Savings Trust proposed that all properties with an Energy Performance Rating of F and G should be banned from being sold or rented from 2015 onwards. This prompted Leasehold Life to ask Grant Shapps, John Healey, Sara Teather and Boris Johnson for their views. Living in a block that was not only built around the 1930’s, but had sustained around twenty years of neglect before we took over the managment of it, the proposal was somewhat worrying. The only reply I received was from the Chief Of Staff to Grant Shapps saying that they were “concerned about the workability of such a scheme”.
Fast forward to 2011 and the Green Deal is currently going through Parliament through the Energy Bill. Agreements are being struck with home improvement firms in an effort to encourage homeowners and property investors to have their properties fitted with energy efficient improvements. There will be no upfront costs because the work will be paid for through a loan payable over 25 years, ideally with money recouped through bill savings.