Tenant wants reduced rent to cover Green Deal loan?

by Readers Question

11:29 AM, 30th August 2016
About 2 years ago

Tenant wants reduced rent to cover Green Deal loan?

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Tenant wants reduced rent to cover Green Deal loan?

I have updated a property of mine with a new extra wall insulation on green deal finance, new boiler and new roof. Which has been an expensive upgrade. My tenants saw a massive improvement in their energy costs. However due to job circumstances they moved out in June.green home

I now have new tenants who I advised the property had just had the above improvements and they should not use a lot of energy. As the property is on a prepaid key meter I advise they could also reduce cost by transferring to direct debit payment.

When contacting the energy provider the tenants have been informed they pay £10.84 per week through their energy bills to pay on the green deal loan. They now want to me to reduce the rent by this amount.

I have tried to explain they will more than recoup this cost over the winter months.

My contract says tenant will pay all bills on the property, but dose not go into standard charges of green deal repayment plans.

I have always tried to get the best deal for my tenants in both energy and cost. However I feel really put out about this situation. Has anyone else had a similar situation?

I would love to hear anyone’s comments.

Thank you

Gareth

 



Comments

David Price

13:41 PM, 30th August 2016
About 2 years ago

Offer to allow the tenant to end the tenancy without penalty. Green deal guaranteed an overall saving, surely he who reaps the reward should also pay the premium?

Romain Garcin

15:04 PM, 30th August 2016
About 2 years ago

That's a reasonable concern.

I have always been of the opinion that landlords must fully disclose the existence and amount of a Green Deal loan to prospective tenants as it may be an unlawful practice not to mention it until a new tenant discovers it on his first utility bill.

Gary Cleary

15:20 PM, 30th August 2016
About 2 years ago

If you provided your tenant with the post Green Deal EPC at the marketing stage, the Green Deal loan should be displayed on the front page of the certificate, it is on there to inform any prospective tenants of the overall efficiency of the building and any outstanding Green Deal loans applicable, together with approximate running costs of space heating, water heating and fixed lighting.

Sean Graveney

15:33 PM, 30th August 2016
About 2 years ago

Tricky one. I don't think you could reasonably expect a prospective tenant to anticipate the repayment of a loan taken out by the landlord to improve the property as being included in the agreement that they pay all bills - but then it should benefit them as I assume the upgrade of your asset will benefit you too.

Jay James

16:15 PM, 30th August 2016
About 2 years ago

I recently spent an awful lot of time looking into Green Deal to replace the boiler in my home. The so called savings could only be estimated, with no evidence to support their accuracy. Green deal was suggested to me but I had to research for hours on end to find out that it was a loan with repayments taken through gas bills. It would have been better to take out a normal loan as this would have enabled purchasing from the full range of boiler manufacturers. In the end I bought one outright from existing funds.

Given the lack of accuracy around so-called fuel efficiency savings I would be hopping mad to find myself in a loan situation, Green Deal or not. - That is from a person who is getting to despise tenants that look to landlords for everything instead of sorting their own issues.

Romain Garcin

16:35 PM, 30th August 2016
About 2 years ago

Reply to the comment left by "Jay James" at "30/08/2016 - 16:15":

I read that interest rates on Green Deal loans are also not necessarily competitive compared to what you could get on a personal loan.

Jay James

16:45 PM, 30th August 2016
About 2 years ago

Reply to the comment left by "Romain Garcin" at "30/08/2016 - 16:35":

Yep, that's what I found after much research.

Gareth - it may be an unexpected expense for you, but it seems you will need to give your tenants all or most of what they ask for on this occasion. I came across nothing to suggest the Green Deal expense and interest is not tax deductable for landlords.

S.E. Landlord

16:57 PM, 30th August 2016
About 2 years ago

It is a loan to fund improvements, as such I believe the repayments are the owner's responsibility.

Gary Nock

9:11 AM, 3rd September 2016
About 2 years ago

One of the reasons the Green Deal failed is exactly this. A long term loan against the property that puts off tenants - they don't see the reduced fuel bills - they just see they are paying for the landlords improvements. Regardless that it benefits them. And also when and if you sell a purchaser will ask you to clear the loan early - which will not be cheap. I looked into a boiler with Green Deal. £1500 fitted and paid for by me. £4000 under Green Deal. The fact that it was advertised as being paid for via the bill was a deception to hide the true cost and dupe landlords into thinking their tenants will pay.

Romain is right. It is not a cost made clear to the tenants and may well breach consumer protection law on contracts even if it says tenant will pay all utility bills. I bet the TA doesn't say tenant will pay the landlords improvement costs.

I think in this instance I would either reluctantly agree to the reduction or meet them halfway on the fact that they are getting cheaper heating bills.

H B

10:21 AM, 3rd September 2016
About 2 years ago

Look at this another way - had you taken out a personal loan to pay for the improvements to the property, would you feel justified in presenting this to the tenant as a surprise when they moved in? No, of course not, but this is essentially the same situation.

There is always a conflict about how much to spend on things like insulation or energy efficiency in general. Prospective tenants want the cheapest rent and do not always consider the costs of running the property. As a result there is a reduced incentive for landlords to spend money on improving energy efficiency.

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