Log in   Register
Falco legal training

Training delivered by an expert with passion and humour

MEES regulations have been made 30 March 2015

The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (2015 SI No 962) appeared on the Government’s legislation website today.  They are dated 26 March 2015 but they definitely were not on the website until this afternoon.

These regulations contain the detailed provisions for the Minimum Energy Efficiency Standard (MEES).  More detail (relating to the application of MEES to commercial properties) is available in my article from earlier today “MEES commencement order is made“.

Everything is now in place in readiness for the 1 April 2018 start date except the promised guidance from DECC.  I imagine this will not be available until after the election, since the new Government will want to consider its contents before it is issued.

One hour training session on MEES and commercial properties

My one hour training session on MEES and commercial properties, for presentation within an organisation, is now available, having been tested on three occasions last week.  The session will cover the following aspects of MEES in relation to commercial properties:

  • Landlords’ obligations to carry out energy efficiency improvement works
  • The types of energy efficiency improvement works that may be required
  • Occasions on which MEES will not be relevant
  • Key dates for compliance
  • Exemptions and the exemptions register
  • Enforcement and penalties
  • Likely effects on new and existing commercial leases
  • Practical solutions for property owners

 

Further details are available on this web page

New one-hour course: Minimum Energy Efficiency Standard Regulations for commercial properties

For those who still have some funds to be spent before the end of the budget year, some dates are still available in April !

Share

Top of page

MEES commencement order is made 30 March 2015

The commencement order that brings the Minimum Energy Efficiency Standard (MEES) into force was made last week.  For MEES anoraks, it’s the Energy Act 2011 (Commencement No 3) Order 2015.  It brought into force the relevant provisions of the Energy Act 2011 on 26 March 2015.

The detailed regulations – the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 will be made this week.  They were approved by both Houses of Parliament last week.  There was no debate in the House of Lords.  You can see what little debate there was in the House of Commons in this extract from Hansard.

I have to admit that I never expected to see this day.  I have always thought the concept of MEES too complex to be able to implement – and I may be proved correct in the coming years.  But the legal framework, at least, is now in place.

Two unknowns

There are still two massive unknowns.  First, who is going to have control of the penalties arising out of breaches of MEES ?  This is apparently undecided within Government.  If the local authorities, who are the enforcement agents, are permitted to keep the money, I foresee a new industry could grow up.  The maximum penalty in relation to commercial properties is £150,000.  That would pay for a whole department of people to enforce MEES in a local authority.  This could become a great way to finance local government.  Local authorities have just been told to stop using car parks as a funding device.  Maybe MEES will replace car parks in that role.  I can’t see voters minding about that.

Secondly, will there ever be a commercial version of the Green Deal ?  The whole concept of MEES was built upon the idea of “no upfront expenditure by the landlord” (see this policy briefing from DECC, undated but probably late 2011/early 2012).  The landlord would make the investment in energy efficiency improvements, but the costs would ultimately be borne by the tenant through the Green Deal.  For various reasons, the Green Deal has not proved popular, and everything I have heard suggests that there is not going to be a commercial version any time soon.  So the concept of “no upfront expenditure by the landlord” has gone out of the window.

In its place, we have the seven-year payback concept.  If an improvement pays for itself within seven years, then it has to be made (provided all the other conditions are met).  But this is going to cost landlords real money – possibly real money that they do not actually have, and cannot borrow.  A property that has been made more energy-efficient does not necessarily have a higher rental or capital value.  That depends upon what else is available in the immediate area.  Some properties may just not be worth improving.  They can still be used for owner-occupation, of course.

I have just finished writing an article about MEES for Estates Gazette with Charles Woollam of Sustainable Investment & Asset Management (SIAM).  I think it will appear next month.  It considers the practical aspects of what landlords need to consider, and makes the point (among many others) that there are still going to be plenty of F and G rated commercial buildings around even after 2023, because there are going to be many buildings where the cost of improvements does not meet the seven year payback rule.  This will particularly be the case with air-conditioned office buildings.  Landlords will still be permitted to let them – if they can find tenants to take them.  If there are other similar buildings in the area that are D or E rated, tenants may prefer to take them.  So landlords may, in effect, be forced into carrying out works that will cost more than they are required to spend by MEES, just to continue to have a lettable asset.  Everything will depend upon the local market.

Rap on the knuckles for DECC

Finally (for today, anyway), for a bit of amusement you might like to have a look at this report from the House of Lords Secondary Legislation Scrutiny Committee on the MEES consultation process last year (and thank you to John Staheli at Nabarro for drawing it to my attention).

This in particular caught my eye:

“Given that DECC’s consultation ran from 22 July to 2 September 2014, largely a holiday period, we asked whether the Department considered taking mitigating action, and whether any consultation respondents criticised the timing of the consultation process. DECC has told us that officials ensured that stakeholders had sufficient capacity to provide feedback; and that a very small minority of respondents referred to the timing of the consultation, or sought extensions to the deadline, and they were told that only views provided within the set consultation period would be guaranteed to be considered. We recognise that the Department had worked with interested parties over some months; however, we consider it bad practice to hold the formal consultation process over the August holiday period, given that there may well have been individuals and organisations who wished to respond to the consultation and who had not been involved in the sector working groups.” (emphasis in the original, not added by me.  I’ve never been able to write that before)

This echoes very much this comment in my consultation response:

“As you are already aware, I believe that the six-week period for consultation has been insufficient, particularly as it fell exactly over the school holiday period. Few committees and groups meet during that period, so you will be receiving fewer, and less considered, responses to the consultation than would have been the case had you consulted for a longer period.

The spring 2015 deadline for making the regulations is no doubt well-intended, but it is an entirely arbitrary deadline. This policy is too important for the process to be rushed through merely to ensure that the regulations are in place before the 2015 general election. If it turns out that further time is needed, it should be provided. I fear that it will otherwise be a case of more haste, less speed.”

In the end, there were just 49 responses to the consultation, which is lamentable given that MEES is potentially going to affect all landlords, whether of commercial or residential property.  Even those with property with E and D ratings will ultimately be affected, when the minimum standard is raised, as it undoubtedly will have to be if the UK is to meet its climate change obligations.  No-one can tell whether the poor response was related to the timing of the consultation, but there must surely have been some connection.

 

Share

Top of page

The heat is on: postponement of registration date for Heat Network regulations 26 March 2015

The Heat Network (Metering and Billing) (Amendment) Regulations 2015, made on 25 March 2015, put back the date for registration from 30 April 2015 (a date with which compliance was practically impossible for many organisations) to 31 December 2015.  They also tidy up some of the drafting in the original regulations.  Exactly what the effect is still has to be investigated.

For further information about the Heat Network regulations, see these previous articles:

The heat is on

The heat is on (continued)

The heat is on: resolving the underlettings concern

 

Share

Top of page

The heat is on: resolving the underlettings concern 25 March 2015

This is the third in a series of articles about the Heat Network (Metering and Billing) Regulations 2014.  You can read the first article (“The heat is on”) here and the second article (“The heat is on (continued)”) here.

These regulations have appeared virtually out of the blue, and are going to require considerable expenditure of resources – both money and time – on the part of landlords of multi-occupied buildings.  They affect district heating networks (not our problem) and buildings with a common heating system (definitely our problem).  In summary:

  • landlords need to register each affected building, individually, by 30 April 2015 – which will require a considerable amount of technical information to be provided to the National Measurement Office (NMO), which will police the regulations.  It is now being suggested that the date may be put back, or alternatively that partial registrations might be acceptable by the deadline, with the full information delivered later.  This has not yet been officially sanctioned, but there seems little chance of full compliance.  There are simply not enough engineers in the country to carry out the necessary work within the next five weeks.
  • landlords will then need to install meters to measure the supply of heating, cooling and hot water to each individual occupier, where it is viable to do so.  Where it is not viable, other steps have to be taken, where it is viable to do so.  This again will require considerable amounts of technical input.  It has to be done by the end of next year.
  • landlords will have to bill on the basis of actual use of energy by individual tenants.  It is not clear whether, and if so in what way, this requirement will override the provisions in individual leases.

 

Underlettings

In my previous article, I raised a query about how the new provisions will apply to underlettings.  The relevant definitions that troubled me in the regulations are:

“heat supplier” means a person who supplies and charges for the supply of heating, cooling or hot water to a final customer, through— (a) communal heating; or (b) a district heat network

“final customer” means a person who purchases heating, cooling or hot water for their own end consumption from a heat supplier

My concern was that I did not think that the intermediate landlord could be treated as a final customer, given that the energy was not being purchased for its own consumption.  Without a final customer, you don’t have a heat supplier either.  One depends upon the other.  So this could mean that the regulations cannot work wherever there are underlettings in a building – which could be a handy means of sidestepping them entirely.

After discussions with other anoraks earlier this week, I have concluded that there is a solution: the intermediate landlord must be a heat supplier.  Then you have a relationship of heat supplier–final customer for each level of letting in a building.  On that basis, the structure fulfils the requirement of the regulations.

This doesn’t necessarily make sense linguistically.  I don’t consider an intermediate landlord – who may simply be the tenant of one floor who is underletting his premises – to be a “heat supplier”.  He doesn’t have any heat to supply.  The heat is being supplied by his landlord.  But it appears that you don’t have to produce heat in order to supply it.  One diagram in the NMO’s guidance document shows a landlord obtaining heat from a district heating system (effectively a supply of hot water into the building from a central boiler outside the building).  The guidance says that the landlord is a heat supplier to its tenants – even though (although this is not emphasised) the landlord is not creating its own heat.

So the conclusion is that each landlord in a building will be a heat supplier – with all the obligations that brings.  There is one further complication, however: there is a common heating system for the purpose of the regulations only where there are two or more occupiers.  So if a tenant of one floor underlets the floor as a whole, the tenant (as landlord) is not a heat supplier under the regulations.  However, if the tenant underlets the floor to two (or more) occupiers, then it is a heat supplier and needs to comply with the regulations.  In particular, it will need to install meters to measure the supply of thermal energy to the two separate occupiers, if this is viable (assuming, of course, that the meters are not already there).  Given that the tenant will almost certainly not be entitled to touch the relevant pipes, because they belong to the superior landlord, it seems inevitable that the installation of meters in those circumstances will not be viable.

Share

Top of page

SRA approves the competence statement 20 March 2015

The Solicitors Regulation Authority (SRA) announced on 12 March that its Board had approved the Competence Statement for solicitors, which will define the standards expected of solicitors at the point of qualification and the steps they need to take to maintain those standards.  It will replace the current CPD arrangements with effect from 1 November 2016 (subject to transitional arrangements for any solicitors who wish to adopt it before that date – see below).

The SRA held a 12-week consultation between October 2014 and January this year, and apparently 72 respondents submitted their views.  I had some strong views about one of the SRA’s proposals, which I set out in this article dated 4 January 2015 entitled “One week left to reply to the consultation on the proposed Competence Statement for solicitors“.

The SRA reported that its Board members agreed to adopting the Competence Statement after consideration of the SRA’s analysis, and amendments of the statement in response to the points raised.  However we have not yet seen the SRA’s analysis, or the form of the revised Competence Statement.  The SRA says that it will be published on the SRA website in early April 2015.  I will report on how, if at all, it has been amended in the light of the consultation responses (and particularly my response) when it appears.

The relevance of early April 2015 is that this is when solicitors are first able to move to the new approach to continuing competence, ahead of the official starting date of 1 November 2016.  I summarised the transitional arrangements for moving to the new approach in my article entitled “Transitional arrangements for the CPD changes in November 2016” on 22 October 2014.

Share

Top of page

The heat is on (continued) 17 March 2015

This article contains some further observations on what I am now calling the Heat Network regulations – effectively a supplement to my article on the regulations entitled “The heat is on” on 11 March last week.

I am using capital initials for defined terms in this article, to highlight them.  Lower case initials are used in the regulations themselves.

1.  Two different types of network

I thought it might be helpful to explain the purpose of the Heat Network regulations.  It is important to understand that they address two entirely different types of heat network, although this is not made very clear.  (I was told yesterday that it was only very recently that even people in the know realised that individual buildings were going to be affected.)

Remember that this initiative is driven by the EU Energy Efficiency Directive.  You can find a chillingly dispassionate explanation of what Member States are required to undertake, written in euro-speak, in this European Commission Guidance Note.

So, there are two different types of heat network.  First, there is the District Heat Network. This is defined as –

“the distribution of thermal energy in the form of steam, hot water or chilled liquids from a central source of production through a network to multiple buildings or sites for the use of space or process heating, cooling or hot water”

Secondly, there is Communal Heating.  Not (as you would expect) Communal Heating Systems.  Just Communal Heating.  Which is weird, and is possibly the first inkling that we are not dealing with conventional UK legal drafting.

Communal Heating is defined as –

“the distribution of thermal energy in the form of steam, hot water or chilled liquids from a central source in a building which is occupied by more than one final customer, for the use of space or process heating, cooling or hot water”

The distinction is that District Heat Networks produce thermal energy in one place (typically a power station, I believe) and then distribute it to several (or many) buildings.  Communal Heating systems produce thermal energy in one building and then distribute it to two or more occupiers.  The common theme is that if the energy (which might be hot water, steam or chilled liquid) is unmetered, the recipients will have no incentive to use less of it. Indeed, they will have no idea how much of it they use, and are therefore in no position to try to use less of it.

So the Heat Network regulations start off by requiring heat suppliers (or should I say Heat Suppliers? – it is a defined term after all) to ensure that – where technically feasible and cost effective – meters are installed, and then used for billing users according to their energy consumption.  Where this cannot be done, heat cost allocators must be installed (and again used for billing users according to their energy consumption).   I also learned yesterday (I had a great day!) that a meter is installed into the run of a pipe, and measures flow with considerable accuracy, whereas a heat cost allocator is attached to the outside of a pipe, and is much less accurate.  But obviously easier, and therefore cheaper, to fit.  But you need more of them, as you need to fit one on every radiator.  Modern office buildings don’t use radiators, of course.  Modern residential buildings do, but then they tend to have individual heating systems (each flat having its own boiler) so the Heat Network regulations will not be relevant to them.

2.  Impact of the Heat Network regulations

I still have no idea just how many buildings are going to be affected by these new requirements.  A quick read of the updated Impact Assessment suggests that the Government does not have much of an idea either.  See, for example, para 6.1.1 which says (with my emphasis – and note the odd emphasis on “dwellings”) –

“The regulations will cover all buildings where there is a central source of heating, cooling or hot water supplying a number of dwellings or units. This will include heat networks which supply a number of buildings, as well as blocks of dwellings which have a central heating source within the building (communal heating). Given the broad definition of heat networks in the directive, there is some uncertainty around the number of properties which are in scope.

As an aside, I think it is likely that we real estate lawyers (and friends) are only going to be concerned with Communal Heating systems and not with District Heat Networks.  In fact, I suspect it is likely that, once life has settled down a bit, this whole area will (mostly) become the preserve of engineers and management surveyors, in the same way as the Energy Performance of Buildings regulations have become the preserve of energy assessors.  However, every once in a while someone is going to need legal advice – in the same way as we get asked such interesting questions as “Do I need an EPC on a lease renewal?” and “Do I need an EPC when buying the reversion to a block of flats that have all been sold on long leases?”  (I’m not giving you the answers. You should know the answers to both of those questions by now.)

(3)  Underlettings

This is difficult, and potentially controversial.  I will be happy to be proved wrong, but I’m not convinced that the Heat Network regulations operate as intended in the case of a building containing underleases.

We need to start with the definitions of Heat Supplier and Final Customer:

“heat supplier” means a person who supplies and charges for the supply of heating, cooling or hot water to a final customer, through— (a) communal heating; or (b) a district heat network

“final customer” means a person who purchases heating, cooling or hot water for their own end consumption from a heat supplier

The problem lies with the two phrases “for their own end consumption” and “from a heat supplier” that I have underlined.  Each makes sense on its own, but together they may not make sense.  Read on …

Assume a four-storey office building, with one lease per floor.  The landlord is L.

Scenario 1: the same occupier (A) occupies all four floors under four different leases.  The regulations do not apply.

Scenario 2: A assigns the lease of one floor to a third party (B).  The Heat Network regulations now apply and the landlord now has to fit meters (or at least investigate the feasibility and cost-effectiveness of doing so).  I wonder whether that would be a reasonable reason for the landlord to withhold consent to assign.  No doubt that case will come to court one day.  I am not willing to hazard a guess at this stage.

Scenario 3: B underlets its own floor to C.  This is where the problem lies.  There are still two occupiers in the building (A and C), so this is a Communal Heating system.  But according to the definition set out above, it seems to me that neither B nor C is a Final Customer.  B is not purchasing heating, cooling or hot water for its own end consumption.  B is not in the building any more, so cannot consume it.  The consumption is that of C.  And C is not a Final Customer as it is purchasing its energy from B (its own landlord) not from the owner of the building, which owns the boiler and other gear that produces the heat, coolth (I think that ought to be a word) or hot water.  There is no relationship between L and C.  C is certainly using the heat etc produced by L, but it is not purchasing it from L.

Imagine a slightly different scenario where there are only undertenants in the building.  Every tenant has let to an undertenant.  In that case, there would be no Final Customers at all in the building, and therefore there can be no Heat Supplier.  The two definitions are complementary.  By the simple process of granting underleases, we have removed the building completely from the ambit of the regulations.  I am sure that this was not intended to be the case.

There is a guidance note prepared by the National Measurement Office on the Government’s website, which you can see here:

Heat Network (Metering and Billing) Regulations 2014 Scope Guidance

However, it doesn’t seem to take us much further (and it doesn’t even consider the possibility of more than one tier of leases).  It says at one point:

“Final customers are the end users of the heating supplied by district heat networks and communal heating. Final customers are effectively the purchasers of the heat who have a direct financial arrangement with a heat supplier to provide the heating to them. The requirement is that a payment is made; the regulations do not explicitly require a contractual arrangement between the Heat Supplier and the final customer.”

Again, this doesn’t seem to help (and we will leave aside for now the fact that the last two sentences seem to be contradictory).  In our case, for the undertenant (C) to be a Final Customer, there needs to be a “direct financial arrangement” with a Heat Supplier (the landlord) to provide the heating to C.  This is exactly what is lacking in the case of an underlease.  No money passes from C to L to pay for the heating.  In the case of an underlease, no money passes from undertenant to landlord to pay for anything.

This difficulty seems to arise because the regulations use a different definition of “Final Customer” from the definition in the EU Energy Efficiency Directive.  In the Directive, Article 2(23) provides that “Final Customer” means “a natural or legal person who purchases energy for own end use”.  It doesn’t say that the Final Customer has to purchase the energy from the Heat Supplier, as the regulations say.

This is not a deliberate attempt on my part to undermine the operation of the Heat Network regulations (not least because that might put the UK in breach of its obligations under the EU Energy Efficiency Directive).  It just seems to me that if the simple act of granting an underlease apparently prevents the regulations operating in the intended manner, further problems may also emerge when implementation starts in earnest.

Comments welcome.  Please use the comment box below.

Share

Top of page

The heat is on 11 March 2015

Boy is it hard being a landlord.  The list of responsibilities and obligations seems never-ending.  As is indeed the case, as demonstrated by the new Heat Network (Metering and Billing) Regulations 2014.

It’s not 1 April.  Read on.  Really.

These regulations, which implement Articles 9, 10 and 11 of the EU Energy Efficiency Directive, apply to “district heating” and to “communal heating”.  District heating means “the distribution of thermal energy in the form of steam, hot water or chilled liquids from a central source of production through a network to multiple buildings or sites for the use of space or process heating, cooling or hot water”.  Communal heating means “the distribution of thermal energy in the form of steam, hot water, or chilled liquids from a central source in a building which is occupied by more than one [occupier], for the use of space or process heating, cooling or hot water”.

Our interest lies in “communal heating”.  So (to paraphrase), these regulations apply to landlords of buildings containing more than one tenant, where heating, cooling (ie chilled water) or hot water is supplied from a central source.  The regulations apply to both commercial and residential properties, although in slightly different ways.  As usual, I will concentrate on commercial properties as that is my background.  In this article I will use the term “affected landlords” to refer to landlords to whom the regulations apply, although this is not a term used in the regulations.

What follows is a summary only.  For more information, I commend to you Clifford Chance’s impressive briefing on the regulations “Heating and cooling in multi-let buildings – potential new costs for landlords“.  But in the meantime, here is my overview.

THREE REQUIREMENTS

The regulations contain three potentially onerous requirements for affected landlords.

1.  Installation of meters

By the end of next year, affected landlords will need to install meters to measure the supply of heating, cooling and hot water to each individual occupier.  That is, unless it is not “technically feasible and cost-effective to do so”.  A complicated schedule to the regulations explains how one assesses technical feasibility and cost-effectiveness.  (This is as much an engineering issue as a legal one, as you will see.)

Where it is not technically feasible and cost-effective to do so, there is a requirement to install “heat cost allocators and thermostatic radiator valves at each room heating radiator in order to determine and enable the control of the consumption of heating by each final customer” and also a hot water meter.

A “heat cost allocator”, in case you were wondering, means “an instrument for the measurement of energy consumption of a room heating radiator where that energy has been supplied from the … communal heating operated by a heat supplier.”  I think that means a meter that records the amount of hot water passing through a radiator.

Oh, but a landlord will not have to install heat cost allocators and thermostatic radiator valves at each room heating radiator and a hot water meter unless it is “cost-effective and technically feasible to install heat costs allocators, thermostatic radiator valves and a hot water meter”.

A “hot water meter”, obviously, is “a meter to measure consumption of hot water by the final customer.”  Presumably that relates to water that issues from a tap, as opposed to hot water passing through a radiator that is then returned (rather cooler) to be reheated.

(2)  Billing

With immediate effect, where meters or heat cost allocators are installed, landlords must ensure that bills and billing information for the consumption of heating, cooling or hot water by a final customer are both (a) accurate and (b) based on actual consumption.  There are other requirements as well.

This is – naturally – only required where it is technically possible and economically justified to do so.  A determination of what is technically possible and economically justified must be made by the landlord in accordance with requirements in another schedule.

(3)  Registration by 30 April 2015

Affected landlords have to register with the sinister-sounding National Measurement Office by 30 April 2015, which is less than eight weeks away.  Registration is not a simple process: it requires the provision of complex technical information about the property. These regulations seem to have been created in December last year but they did not come to the attention of property lawyers until last week.  So time is now desperately short.

PENALTIES

There are civil penalties for non-compliance but breach of these regulations can, in certain circumstances, be a criminal offence.  Gulp.

COMPARISON WITH MINIMUM ENERGY EFFICIENCY STANDARD REGULATIONS

It is extraordinary how different in style, and in the method of introduction, these regulations are from the recently issued (and still draft) Minimum Energy Efficiency Standard (MEES) Regulations.  MEES is going to be a doddle compared to the requirements in the Heat Network regulations.  MEES takes account of tenants’ rights to prevent landlords interfering with their occupation, for example, whereas the Heat Network regulations do not (unless one can argue that the presence of a tenant makes the installation of meters technically not feasible – which needs further consideration).

The Heat Network regulations require billing for heating and hot water to be based on users’ actual consumption.  This makes sense when one is trying to alter people’s behaviour, but takes no account of any existing contractual arrangements.  Where a lease contains a mechanism for calculating the cost of services (such as a fixed percentage, floor area ratio or proportion based on rateable values), how will landlords accommodate the new requirements?  It’s entirely unclear for now.  Does this legislation trump existing contractual arrangements?  I imagine that the EU will assume that it does.  There does not seem to be any get-out for cases where it is legally not feasible to comply.  The only non-feasibility relates to technical issues.  This too needs further investigation.  The regulations are 19 pages long and do not make for easy reading.

Who is going to pay for the cost of compying with these new requirements ?  It’s likely that the cost of complying with MEES cannot (in the main) be passed through to tenants via the service charge provisions of a lease.  With the Heat Network regulations, on the other hand, landlords will probably be able to pass through at least the cost of physical installation of meters, heat cost allocators and thermostatic radiator valves to the tenants.  Most leases will allow landlords to charge to the service charge costs incurred in complying with legislation.  It might be more difficult to charge the cost of updating billing systems to render bills to tenants based on their actual consumption of heat and chilled water.

And finally, compare the sanctions for non-compliance.  With MEES the potential penalties are severe (up to £150,000 for commercial properties), but they remain civil penalties.  No-one is likely to go to gaol for non-compliance with MEES.  But this is not the case with the heat network regulations.  Non-compliance can, in certain circumstances (around which I have not yet got my head), amount to a criminal offence.

I don’t think I’m going to bother with a 1 April article this year.  Nothing could match this.

It’s real, I tell you.  Here’s the page on the Government’s website about it.  I couldn’t have faked that, could I?

Share

Top of page

Consultation about the usefulness (or otherwise) of Display Energy Certificates 9 March 2015

It is one of life’s great disappointments that the Government department that regulates DECs (Display Energy Certificates) is not DECC but DCLG.   Or, for those not familiar with these abbreviations, not the Department of Energy and Climate Change but the Department for Communities and Local Government (usually known as just “Communities”).  Actually this comes as no surprise when you learn that DECC was not created until 2008, after DECs were already on the scene, but it’s disappointing all the same.

Anyway, the point of this article is that on 11 February, less than four weeks ago, Communities issued a consultation on whether DECs should continue in their current form.  One of the alternatives suggested is to abolish them completely.  You can read a copy here.

DECs are relatively rarely encountered by commercial property lawyers.  We are familiar with EPCs, as they are needed before a sale or a letting.  DECs are required for buildings that are occupied by public authorities, to show actual energy use over the past three years.  This is arguably more useful than EPCs, which show a building’s potential energy efficiency (a building with an EPC “A” rating will still cost a lot to run if you leave all the windows open and all the lights on).

The consultation runs for an astonishingly short time.  It closes on Wednesday this week, 11 March.  Such a short period of consultation is often taken as a sign that the Government department undertaking the consultation already has a pretty good idea of what it wants to do, and doesn’t want too many responses to analyse before a “decision” can be reached.

Sceptics are even suggesting in this case that Communities wants to push through amending regulations before the General Election in May – which would have to be made by the end of March, after which Government all but closes down.  That sounds unlikely, but cannot be ruled out.

Do we mind what happens to DECs?

Until last week, I was agnostic about DECs.  They existed, but I wasn’t too concerned whether they existed or not – a bit like my views on cricket, say, or Graham Norton.  But after a chat last week at Ecobuild with Hywel Davies, the Technical Director of CIBSE (the Chartered Institution of Building Services Engineers), I am convinced that they may serve a useful purpose.  They make clear whether energy use in a building is increasing or decreasing year on year, which has to be a good thing.  And in a couple of cases they have enabled large amounts of energy wastage to be identified – leading to savings that recur every year.

Hywel has prepared this commentary on part of the consultation document (now on the CIBSE website):

Review of section 2 of the consultation paper

Another enthusiastic proponent of DECs is Andrew Warren, the honorary president of the Association for the Conservation of Energy.  This article in Building magazine makes for interesting reading:

Pickles’ DEC consultation beggars belief

What next?

You might just find time to look at the consultation between now and Wednesday, and send in a short response (as I will be doing).  Even a short response might be enough to give Communities pause for thought, if they receive enough of them.  It looks to me as if a bit more analysis of the usefulness (or otherwise) of DECs is required.  Consigning them hurriedly to the waste bin (one of the possible options) in the weeks before a General Election does not look like good decision-making to me.

Share

Top of page

Consultation on proposal to update the Electronic Communications Code 4 March 2015

Last week the Government issued a consultation document on its proposal to update the Electronic Communications Code.   You can download a copy here.

The consultation closes on 30 April 2015.

The consultation document contains a draft bill, which is presumably the same text as the Government’s very short-lived amendment to the Infrastructure Bill (see my articles “Sudden reform of the Electronic Communications Code” on 13 January 2015 and “Government withdraws amendment to revise the Electronic Communications Code” on 23 January 2015).

I have not yet read the consultation document, but I see that there are 24 questions, some of which raise difficult issues about contracting-out, relationship with the land registration system and whether or not the new code should apply to existing agreements.  One wonders how the Government (ie the civil servants involved) really expected to be able to revise the Code by plonking a new version into a 59-page amendment to the Infrastructure Bill without a prior consultation with interested parties.

There is plenty here for property lawyers to consider.  I will write a longer article about the proposals once I have read them.  In the meantime, please do let me have any thoughts via the comment box at the end of this article.

Share

Top of page

CRELA’s Commercial Real Estate Update in the City of London 3 March 2015

Here are details of the forthcoming CRELA** Commercial Real Estate Update in the City of London (at which, by chance, I will be one of the speakers).

** CRELA = Commercial Real Estate Legal Association – see www.crela.org.uk

Thursday 23 April – City of London

This will comprise a 90 minute session covering three main topics on current
commercial real estate issues.

The Law Commission’s Land Registration project
Professor Elizabeth Cooke (Law Commissioner)

The Law Commission has recently started work on this new project, which
comprises a wide-ranging review of the Land Registration Act 2002, with a view to
amendment where elements of the Act could be improved in light of experience
with its operation. In particular, this project will examine the extent of the Land
Registry’s guarantee of title, rectification and alteration of the register, and the
impact of fraud. The project will also re-examine the legal framework for electronic
conveyancing, and consider how technology might be harnessed to reduce the
time and resources required to process applications while maintaining the
reliability of the register and public confidence in it.

Professor Elizabeth Cooke was appointed Commissioner with responsibility for
Property, Family and Trust Law in July 2008.

Recent and forthcoming changes to SDLT
Richard Smith and Peter Williams

In the past Stamp Duty Land Tax (SDLT) has applied both in England & Wales
and in Scotland, and significant changes were made to SDLT on residential
property in all jurisdictions last December.  But in April SDLT will be replaced in Scotland by an entirely new tax, the Land and Buildings Transaction Tax (LBTT). LBTT will apply to all land in Scotland irrespective of where the purchaser is based. The Scottish Government will have control over the tax base as well as the rates, and the administrative arrangements for LBTT will be different, with an online system intended to be more modern and user friendly.

This session will provide an overview of all these changes, both north and south of
the border, to ensure that lawyers in England and Wales are fully up to speed with
these important developments which will affect their clients’ portfolio acquisitions
across the whole of the UK.

Richard Smith is a dual-qualified real estate partner in Brodies LLP, a Scottish law
firm with offices in Aberdeen, Edinburgh, Glasgow and Brussels. 

Peter Williams is a freelance legal trainer, writer and lecturer at Falco Legal
Training.

The Model Commercial Lease
Peter Williams

The Model Commercial Lease (MCL) is an initiative from the property industry
itself, intended to speed up lease negotiations while maintaining the flexibility that
both landlords and tenants require to run their businesses.  This session will
introduce you to the MCL and consider its pros and cons (but mostly its pros).

Peter Williams is a freelance legal trainer, writer and lecturer at Falco Legal
Training.

Venue:

Atlantic House, Holborn Viaduct, London EC1A 2FG

(Offices of Hogan Lovells International LLP)

Timings:

6.00 pm – 7.30 pm

followed by drinks and networking until 8.30 pm

1.5 CPD points

Tickets:

No attendance restrictions.  Open to everyone.

Please book using the Booking Form which you can find here.

Members £25 + VAT.

Others £45 + VAT.

 

Share

Top of page

CRELA’s inaugural event in the Thames Valley 3 March 2015

Here are details of the inaugural CRELA** meeting in the Thames Valley (at which, by chance, I will be one of the speakers).

** CRELA = Commercial Real Estate Legal Association – see www.crela.org.uk

Thursday 19 March 2015 – Wokingham

Join colleagues from law firms Clifton Ingram, Field Seymour Parkes, Mercers, Allan
Janes and Colemans (amongst others) for the inaugural CRELA (Thames Valley)
event on Thursday 19 March 2015 from 5.00 pm to 7.00 pm. The event will be held
at Clifton Ingram’s office in Wokingham.

CRELA’s Thames Valley group will focus on the issues, challenges and opportunities
that commercial property professionals in the region encounter, combined with some
valuable networking.

The event will feature presentations from two accomplished speakers and is worth
1 CPD hour:

Dr Ashley Bowes, a barrister at Guildford Chambers, is a recognised expert in
planning law and procedure. Ashley will speak on “The top five things every property
lawyer should know on planning”, which will include community infrastructure levy
(CIL) and planning obligations.

Peter Williams of Falco Legal Training will provide an update on various commercial landlord and tenant issues, including the Minimum Energy Efficiency Standard regulations that take effect in 2018 and the new Model Commercial Lease. Peter has been personally involved in both these developments.

After the talks there will be an opportunity for questions and then time to network
over drinks.

Cost: CRELA members – free
Non-members – £25 (equivalent to the annual CRELA subscription)

To register to attend this event, or for more details, please contact Melissa Baxter at
Clifton Ingram (melissabaxter@nullcliftoningram.co.uk or telephone 0118 912 0210).

Share

Top of page