Welcome To Simplydocs

Monthly Archives: October 2019

Government Consultations on Energy Efficiency

Energy Efficient Housing

The UK is the first major economy to pass laws to stop all of its greenhouse gas emissions by 2050. In order to meet this target, the Government will need to take a number of steps. The Government has recently launched the following three consultations (with further consultations to follow) to advance the reduction of carbon emissions as soon as possible.

1. Consultation on Changes to the Minimum Energy Efficiency Standards for Commercial Property

The Government’s preferred option is for all commercial properties to achieve a minimum energy efficiency rating of B by 1 April 2030 (if cost effective) or if this cannot be achieved, the alternative would be for all commercial properties to achieve a minimum energy efficiency rating of C by 1 April 2030 (if cost effective). The current minimum energy efficiency rating for commercial properties is E.  If the rating is changed in April 2030 as the Government currently proposes, landlords will not be able to let their properties which are below rating B or C (depending on the outcome of the consultation and subsequent legislation made).

For the improvements to be cost effective, the expected savings from these improvements over a seven-year period must be equal to, or outweigh the cost of, the improvements to get the property to the energy efficiency rating prescribed. If the seven-year payback test cannot be met, there will be an exemption (as there currently is for buildings which fail the seven-year payback test to achieve at least an E efficiency rating).

The consultation also asks for views on whether this should be a single change to the minimum energy efficiency rating or whether the change should be gradual so that the rating is improved in stages. The idea behind a gradual change is there is likely to be more incentive to carry out the works sooner instead of them being done just before the proposed deadline of April 2030.

The consultation applies to England and Wales only. Responses are welcome from property owners, landlords, and investors. A link to the consultation can be found here. The consultation closes on 7 January 2020.

2. Consultation on Increasing Energy Efficiency for New Builds by Amending Building Regulations to Achieve the New Future Homes Standard

The Future Homes Standard for new-build homes in England was proposed by the Government earlier this year and is to be introduced by 2025. The Future Homes Standard proposes that new homes must be future-proofed with low carbon heating and improved fabric standards (such as triple glazing) to limit heat loss.

The consultation sets out two options (Option 2 is preferred by the Government) to amend Building Regulations to raise energy efficiency in new homes as follows:

Option 1 – To achieve a 20% reduction in carbon emissions (from the current standard) by requiring new-builds to be constructed with very high fabric standards (e.g. triple glazing) to limit heat loss and to have a wastewater heat recovery system installed in the house; and

Option 2 – To achieve a 31% reduction in carbon emissions (from the current standard) by requiring the installation of low carbon heating, renewables (such as solar panels) and better fabric standards in new-builds.

The consultation is for England only and responses are welcome from property owners and occupiers, property developers, and builders. A link to the consultation can be found here. The consultation closes on 10 January 2020.

3. Consultation on Amendments to the Heat Network (Metering and Billing) Regulations 2014

This consultation sets out proposals to amend the Heat Network (Metering and Billing) Regulations 2014 to ensure, where cost-effective and feasible, that individual heat consumption meters are installed on heat networks and that customers are charged based on consumption.

‘Heat Networks’ are systems where heat for an area is produced centrally and is transported to end users through a network of underground and overground pipes. Heat Networks reduce carbon dioxide emissions.

The consultation also seeks views on the introduction of three building classes (which will determine whether heat consumption meters need to be installed or not). The suggested building classes are as follows:

  • the ‘Viable’ class (individual meters must be installed)
  • the ‘Exempt’ class (meters not required)
  • the ‘Open’ class (meters or heat cost allocators required if cost-effective)

A link to the consultation can be found here. Responses are welcome from landlords. The consultation closes on 12 December 2019.

Secretary of State Now Has Power to Make Regulations on Electrical Safety Checks

Electrical Checks

New regulations have been passed which give the Secretary of State for Housing, Communities and Local Government powers (from 25 October 2019) to impose duties on private residential landlords in England to carry out mandatory electrical safety checks when premises are occupied under a tenancy.

The Housing and Planning Act 2016 stated that if further regulations are introduced then the Secretary of State may impose obligations on private residential landlords in England to carry out mandatory electrical safety checks.  These powers have now been granted.

The electrical safety checks are likely to require that private landlords ensure all electrical appliances, fixtures and fittings, and installations for the supply of electricity meet a certain standard.  These checks may also require certification from qualified persons.

Now that the Secretary of State has the power to impose mandatory electrical safety checks on residential landlords it is likely that draft legislation will shortly follow once parliamentary time allows.

Here at Simply-Docs we will publish further details on this as developments unfold and will update our documents if necessary once any legislation on this is passed.

Proposed Regulation of Property Agents

Row of Houses

The Government has now received its report from The Regulation of Property Agents (RoPA) working group, which the Government had commissioned last year. The Government asked the RoPA to advise them on whether “Property Agents” in England (which includes letting agents, managing agents, estate agents, online agents, and auctioneers) should be regulated by an independent regulator, with mandatory qualifications and a code of practice and how these proposals would operate in practice.

The working group was made up of members from various institutions and associations, including the Royal Institution of Chartered Surveyors (RICS), the Association of Residential Letting Agents (ARLA), and the National Landlords Association (NLA).

Any person can currently operate as a managing agent, letting agent, or estate agent in England without having any qualifications and without having a licence. This has resulted in bad practice within the industry and a distrust in Property Agents.

Whilst statute does regulate estate agency practices in England to an extent, there are no regulations in force in England which regulate letting agents and managing agents, although some letting and managing agents do follow voluntary codes of practice by virtue of being members of associations such as ARLA and NLA. The report concluded that property agency is an imperfect market for two reasons: 1) Residents do not choose and cannot easily remove an agent; and 2) owners do not have the information to negotiate effectively or hold agents to account. As a result, change is needed.

The RoPA’s report recommended the following:

1) There should be a new proposed regulatory framework for all Property Agents in England. The Government should create a list of ‘reserved activities’ which can only be performed by licensed Property Agents at a regulated firm.

“Property Agents” does not include property portals such as Rightmove or Zoopla or the short-let sector (Airbnb), but the report recommends that legislation should allow for future regulation of landlords and developers.

The regulator should be a new public body which would have the power to enforce the new regulatory framework and take action against Property Agents who fail to comply.

2) All property and qualifying agents should be required to hold and display a licence to practise from the new regulator. Before obtaining a licence, the agents would need to comply with their legal obligations and be subject to a fit-and-proper person test.

3) There should be a single, high level code of practice which sets out the principles applicable to all Property Agents which is set in statute.

4) There should be mandatory qualifications for all licensed agents carrying out ‘reserved activities’ and different qualification levels for those in the industry with compulsory training to continue professional development for all staff levels.

Draft legislation is likely to be introduced to regulate Property Agents, which will incorporate the RoPA working group’s recommendations once parliamentary time allows. A copy of the full report can be found here.

Are you a Property Agent? Do you welcome the recommendations set out in the report? Your comments are, as ever, welcome.

Law Commission Report on the Electronic Execution of Documents

Electronic Signature

Following our blog back in September 2018 on the Law Commission Consultation (available here), the Law Commission has now issued its report on the electronic execution of documents.

The report confirms that current laws permit electronic signatures, but that the law is not very accessible to non-lawyers and businesses. The aim of the report is to clarify concerns as to whether electronic signatures are admissible and to ensure that the law governing this area is sufficiently certain. The Law Commission has set out an option for reform – that the Government may wish to consider codifying the law on electronic signatures in order to improve the accessibility of the law.

It is important to note that this report excludes two categories: 1) documents that are to be registered at the Land Registry; and 2) wills. The issue of whether electronic signatures can be used in these two instances is being considered separately.

The report affects England and Wales only.

Key Conclusions

1. The Law Commission report confirms that an electronic signature can be used to execute a document (including a deed) provided that the person signing the document intends to authenticate the document and that they comply with any execution formalities. The Commission’s view is based upon legislation and court decisions which relate to both non-electronic and electronic signatures.

2. An electronic signature is admissible in legal proceedings.

3. In terms of executing deeds in the presence of a witness, the physical presence of that witness is still required even where both the person executing and the person witnessing are both doing so electronically.

The Law Commission concluded that parties could not be confident that the current law allows for “remote” witnessing (where the witness is not physically present when the signatory signs the deed).  The Law Commission considered two potential options to address this issue:

a. Witnessing by video link and witnessing through a signature platform; or
b. The use of digital signatures or other form of technology to replace witnessing.

Next Steps

The report recommends that:

1. An industry working group be set up to produce guidance for the use of electronic signatures in different commercial transactions;

2. The industry working group consider practical issues concerning the electronic execution of documents, provide solutions to the practical and technical obstacles for video witnessing of electronic signatures on deeds, and provide for legislative reform to overcome these obstacles if required; and

3. There should be a future review of the law of deeds and consideration as to whether the current requirements for executing a document as a deed are still relevant today.