What is the Green Deal Loan?
Green Deal loans are being offered by supermarkets and energy companies to pay for property improvements that will increase the energy efficiency of a property, such as double glazing or loft insulation. The interest rate is roughly seven percent a year and you repay the loan through your energy bills. The Golden Rule is that crucially your monthly repayments should not exceed your monthly savings made as a result of the improvements.
Green Deal Loans are attached to the property undergoing the improvements, rather than the person taking out the loan.
How does the Green Deal Loan affect house sales?
The Green Deal (Disclosure) Regulations 2012 state that disclosure should be made at or before the viewing of the property, or as soon as possible after the purchaser has made an offer. If the seller does not disclose there is a Green Deal Loan over the property, the seller will be liable for misrepresentation and the purchaser has 90 days to repudiate the loan.
Since the loan will remain with the house it may affect the price.
How can you find out if a property is subject to a Green Deal Loan?
The Combined Standard missives now in use by almost all solicitors in Scotland provide for Green Deal disclosure because Green Deal Loans are not on Land Certificates, Property Enquiry Certificates or Form 12 Reports. In Scotland, the Energy Savings Trust records all properties with Green Deal Loans. The Energy Performance Certificate Register is the best place to look for Green Deal Loans, but there are still restrictions as to the information that can be accessed and you will need a report reference number.
For advice on the issues raised, contact David Johnson at [email protected].