November e newsletter

Introduction

As the year draws to a close we take a look at how the Carbon Reduction Commitment Energy Efficiency Scheme has been modified from an incentivised ‘cap and trade’ scheme into something resembling a green tax. We highlight the reduction in service from the Essex Fire Brigade following the Coalition Government’s comprehensive spending review and also look at how the Better Building Partnership (BBP) is looking to collaborate with occupiers to deliver more sustainable buildings.


Are you ready for the festive shut down? If you approach it sensibly it could save you money and give you peace of mind. We also take a quick look at the January increase in VAT, and finally we look at why we believe you should work with your landlord, in our Q&A.


''For a current update film on CRC and necessary behavioural change,from leading UK influencers, go to... Property Week [PW.cffnbzelmoqwzqmecoz@propertyweek.ubm-info.com]''


Major adjustments to CRC by Coalition’s CSR

The Government’s Comprehensive Spending Review (CSR) has introduced fundamental changes to the way the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) is administered, which will have cashflow and timing implications for both Landlords and Tenants.

In its simplest form, the impact on business will be postponed, as the 2011 allowance sale (for 2011-2012 emissions) will now not take place until 2012.

The second fundamental change is that the revenue generated from such sale will now not be recycled to participants but will be retained by the Exchequer, thereby effectively switching the scheme into a Green Tax. The original legislative net which was used as a driver towards less energy consumption contained an opportunity for reward for lower usage plus positive PR benefits but no longer…the Scheme’s simpler format now just looks like additional cost to participants. The League table,however does remain so this still offers a reputational incentive for businesses.

And this cost looks like arriving during 2012 and may appear as a ‘double-whammy’ as participants will have to buy their 2011-12 allowances plus those for anticipated usage during 2012-13.

Uncertainty still remains as to a Landlord’s ability to pass on certain CRC costs to Tenants and as before, much remains enshrined in the wording of existing leases, plus the ability of parties to agree suitable wording in new leases. Now that CRC more closely resembles a tax, it seems that in those buildings where the landlord procures power and recharges the tenants, he may be able to obtain CRC cost repayments too as part of a Tenant’s covenant to pay all outgoings(including taxes). Tenants will no doubt try to argue against this being seen as a Tax, and indeed if a Landlord requires additional allowances he will be forced into the secondary market to buy more, which, in itself does not resemble a tax.

If the balance of power is now drifting towards Landlords, we wonder what implications there are for new leases where a Tenant may be shortlisting very similar buildings but due to the difference in ownership structures between landlords, one may be looking to the tenant to pay CRC costs, whereas another may not be even falling within the range of the CRC regime at all. The impact could, therefore be felt by small as well as large occupiers, and noteably, if a non- CRC Landlord sells to a CRC one, the impact for the occupants could be very real.

The Government has now called for a period of Consultation on the subject until December 17th 2010.


Fire brigade no longer responding to business alarms

Fire fighters in Essex have confirmed that they will no longer respond to automatic alarms from business premises or from calls from telephone kiosks that are abandoned.

They say that this is because some 97% prove to be false alarms and they want to ensure that their operational resources are deployed more effectively.

Essex’s Chief fire officer said that taxpayers should no longer bear the cost of businesses failing to maintain their alarm systems and that there exists a greater need to have teams ready to respond to real emergencies.

This clearly illustrates the need for landlords, property managers and occupiers to undertake the necessary and regular checks on the systems that their manufacturers require.

Outside of Essex therefore, parties responsible for the building’s system, should also check with their local fire authority to understand upon what basis a fire crew will attend an alarm call out.


Better Building Partnership Forum 2010

On November 10th, TAP attended the BBP Forum 2010 which was entitled ‘Owner Occupier Partnerships-Panacea or Impossibility?’

The BBP is a collaborative organisation made up of some of the largest commercial and public property owners in London, and, as their mission statement sets out..’’All members are working together to improve the sustainability of London’s existing commercial building stock and accelerate the reduction in CO2 emissions from those buildings’’.

The Forum addressed 3 topics which were attended by all participants in rotating groups; they were

1. Sustainable Retrofit, energy performance contracting in multi-occupied buildings

2. Transactional and Letting Agents; a key role to play in promoting sustainability to both owners and occupiers?

3. Owner Occupier partnerships; what can realistically be achieved?

In brief, the messages from each were as follows:

1. This follows a model in contracting with ESCOs (Energy Servicing Companies) and participants should view them as an ongoing service rather than just a cost item; they need simplification and to become an industry standard with a recognised seal of approval; but at a primary level there still needs to be co-operation between Landlord and Tenant, as a Landlord cannot simply compel a Tenant to make building or spacial improvements. The Forum concluded that there would always be an issue when talking about ESCOs in buildings with short lease terms remaining.

2. Agents knowledge was deemed to be poor and lacking in detail of issues facing both Landlords and tenants. Few, if any firms were educating agents sufficiently, enabling them to guide clients in matters of sustainability with most agents still focusing on the 3 Heads of Cost (i.e. Rent, Rates and Service Charge). There were regional differences noted with London tending to fare better. The BBP saw fit to provide Tool Kits and a Charter for their agent members to adhere to.

3. There were barriers to overcome, namely Who pays, who benefits, Trust, Interests not being aligned, lack of common language, education, how to treat existing lease agreements, is the financial prize worth the effort and the supply chain .i.e. is the property manager meant to be undertaking much of this work?

As a general summary of the event, it seems that many sustainability issues are still out of sight and out of mind and the BBP will continue to see itself as one champion in the mission to better broadcast these important messages. They conclude that they need more Forums, to engage with more occupiers, to produce more Tool Kits, to highlight more case studies and to make more interactive use of their website.

There is clearly still a long way to go to affect behavioural change in this area.


Festive shut down – How prepared are you?

For many us we look forward to the festive period with delight after a long and often challenging year, and that can mean we shut and lock the door on Christmas eve and hope nothing happens while we’re all enjoying the annual celebrations. However, as a company, what contingency is in place should something happen? Does the property manager or your landlord have your contact details? Where is your business insurance policy? Have you turned off all non-essential equipment?

Many of these questions you may think are common sense but you would be surprised how many businesses are not prepared for this eventuality. It is also important to appreciate that in the winter with much colder weather, the chances of potential accidents relating to burst water pipes or electrical faults can be higher than other times of the year.

In many multi-occupied properties the landlord or property manager will have in place some form of security cover and this may involve a red care security alarm with a telephone link to a monitoring station, periodic patrols by a security firm or constant 24hour security presence. In each situation should an incident occur it may result in the need to have up to date contact details. Not only is it important for an occupier to pass on their key holding information but it will also be important for an occupier to know how they can contact their landlord or property manager.

However, an occupier may want to use the services of a key holding company who, as the title suggests, can hold a set of keys on behalf of the occupier and it is they who will be called first in the event of a problem. Costs for such a service would range between £350 - £750 per year and would depend on where your office is located.


VAT – When does it increase?

Following the Coalition Government’s Comprehensive Spending Review, VAT is set to increase early 2011; any invoices raised on or after the 4th January 2011 will attract the new level of VAT. This is the third time in as many years that changes have been made to the level of VAT with the rate reducing in 2009, returning to its original level in 2010 and, now at the start of next year, increasing to 20%.

The rules surrounding when and how much VAT to charge are complex at the best of times and so when there is a change in rate or circumstances then interpretation can prove even more difficult. However, in simple terms if you’re a retailer and you sell an item on or after January 4th then the new 20% rate would apply, however, should a customer take delivery of an item before this date and an invoice is raised after January 4th then the supplier can apply the lower rate of VAT.

This is only a simple example that shows it is not straight forward and so we have found the easiest place to look, should you not have access to an accountant, is HM Customs & Excise (www.hmrc.gov.uk/vat and then search under ‘rate increase’). This will provide you with simple details on how to interpret the rate changes.


Q&A As a business,how important is it to work with my landlord?

Traditionally the relationship hasn’t always been co-operative between the landlord and the tenant despite the obvious benefits that can flow from having such a good understanding of one another’s needs. Trust is at the heart of the relationship and is not always regarded highly enough. Over the years both tenants and landlords have gone to extreme lengths to hide aspects from one another about what each party wants from a property but of late this is changing.

Combining the downturn in the economy, the general decline in lease term lengths and the common desire to see a more sustainable environment is, in our opinion, bringing landlords and tenants together. It is important to note that it is the landlord who has the opportunity to enhance the services on offer to a building, albeit with the co-operation of the occupiers. In answer to the shorter leases being offered and demanded , the opportunity for landlords and tenants to work together is becoming more relevant and this is happening.

Furthermore, with external factors such as increases in fuel prices and the emergence of green taxes, the need to enhance a property’s efficiency is no longer a luxury and more a necessity. Value for money can be demonstrated more easily now as financial benefits can be identified given the increase in technology versus cost of energy. The growing cost of supplying energy to a property is forcing more innovation and the need to form a better working relationship with your landlord is now essential.

Throughout the life of a lease an occupier will need to make changes to their demise, may even require to assign or sub let space or install equipment outside their demise and this will require co operation from the landlord. This co operation is based on honesty and trust and underpins a strong working relationship. It is now a requirement of both the landlord, tenant and property manager to be more accessible and open with each other and we would promote the need for an occupier,where appropriate to support this working ethos as it will benefit them in the long term.

September E Newsletter

This month we consider public sector action and the potential implications for business following rallying calls from the recent TUC Conference;we draw further attention to the CRC debate and highlight the 30th September deadline;we then highlight the shrinking length of the average UK commercial lease and see who this news is good for before introducing a HSE website which shows how better management in this area can benefit the small business.


Our Q and A this month deals with Assigning a commercial lease and touches on some of the legalities and commercial aspects associated with such a disposal method.



Brace Yourself for Disruption

The Unions and Government have opposing views on how to resolve the country’s financial deficit and this may lead to severe disruption in the coming months. As a business, it is important to plan for all eventualities and this situation is no exception. We are thankful that we have been given plenty of warning and this should give you enough time to plan ahead.

With the prospect of widespread strikes looming, many of those services we take for granted are likely to be interrupted leaving many of us severely inconvenienced. Whilst we can only guess what services are likely to be affected, we nevertheless would do well to try and plan how our businesses will cope faced with the prospect of having to do without, for example, a reliable postal service. How will we receive payment of our services, how will we pay our rent or service charge, will our staff be able to reach their place of work, will we have to have more of our staff working from home if the transport network isn’t working? People and businesses will need to carry on and it is now that businesses may wish to dust off their contingency plans and review how they will continue performing the services for their clients.

Managing Agents and Property Owners may also struggle to maintain and service their buildings. Difficulty in sourcing parts, manning the security desks, attending to breakdowns and so on, all impact on the operation of a building. It is clear that people will use their best endeavours to ensure services continue to be provided but it is also worthwhile reviewing your own plans for such circumstances. Communication will be key to ensuring people are aware of what is happening to the building or where businesses struggle to meet their commitments. This is the case for both the property manager and occupier.

Sometime ago The Government, through their website www.direct.gov.uk issued a Business Continuity Management Toolkit which outlines how a business reviews their operation. By applying these principles a plan can be drafted to deliver a strategy that will improve resilience against any potential disruption. We have a link to the Toolkit on our site so please feel free to contact us if you are not a subscriber and would like a copy e mailed.




Service Charges - The Question of Repair or Improvement

One of the most contentious subjects in the property management profession surrounds the thought that the Landlord gradually improves his property, at the expense of the Tenant, by replacing elements of the building with better items, thus improving his property. When it comes to spending the service charge, the actions of the Property Manager will always be questioned; certainly in these austere times.

But how do we know what items of expenditure are right and appropriate? Within a building, the service charge expenditure is governed by the contents of the lease contract between the Landlord and Tenant. However, examples of appropriateness is shaped by case law and a recent case centres on whether it is right to replace single glazed windows with double glazed units. Although it is a case that relates to residential leases the principal will apply to commercial practice.

The case of Craighead v Homes for Islington Ltd & Anor [2010] involved a block of 21 flats where the windows had come to the end of their useful life and required replacement. The Landlord replaced the windows and by installing double glazed units increased the costs by 13%. The tenants challenged saying that the Leases only allowed for the recovery of service charge expenses for the renewal and not improvement of the properties. However, as this was a residential case the dispute was heard by the Lands Tribunal and their Upper Chamber decided it was appropriate for these problem units to be replaced and did not deem it as an improvement.

On many occasions it is appropriate to consider whether the increase in efficiency of an item warrants any additional costs and in many instances it does.




CRC - What's the next stage?

Landlords across the country are trying to ensure, where it is necessary, that they have registered for the Government’s Carbon Reduction Commitment (CRC) Energy Efficiency Scheme. The deadline for registration is the 30th September. But whilst they are heading towards the Registration deadline day, what will happen next? This is just the first stage, the next stage is to reflect on annual energy usage and develop a policy of using power more efficiently.

The scheme measures success in 3 ways; using an absolute matrix, where companies are judged by how much they have reduced their energy consumption, a growth matrix where consideration is given to how companies have grown and an early action matrix where consideration is given where an effort has been made before the start of the scheme. The outcome of this combination leads to the results being published in a league table and rightly some companies will take their league position very seriously.

Property Managers have begun looking at ways of improving energy management. Consideration, up and down the country, will be given to new energy efficient ways of managing property but even then the Property Manager can only really influence how the common parts perform. Examples are already being identified such as the RPS Group plc where they are testing a new retrofitted lighting control system in their London office. It is suggested that this will help to reduce the electricity costs of lighting by up to 70%. Each occupier will be encouraged to be aware of their energy use and through such management tools as the ISO 16001 will be reminded of the need to alter behavioural change.

There is already enough published material available which identifies areas where office occupiers can look to reduce their energy consumption such as upgrading switches in meeting rooms to reduce consumption when not in use, or network more people to less printers to reduce printers standing idol. The Carbon Trust estimate that through simple office management, occupiers could reduce their annual energy consumption by up to 20%. At these levels it is worth thinking about.

This is a huge and topical issue; we have the documents on our system and if you would like copies e mailed then please contact us.




Shorter Leases: for whose benefit is this?

In its Annual Lease Review, the British Property Federation (BPF) and the Investment Property Database (IPD) have recently reported that since 1999 average lease lengths have almost halved from 14.3 to 8.6 years.


The study takes in details of some 91,000 tenancies representing a rental value of £6.3bn and the recent result shows the 8.6 year figure to be the lowest ever recorded. Furthermore the study also saw an increase in the percentage of leases of 5 years or less, rising from 66% to 72%.Now only 10% of leases are set for terms of 10 years or more.

The retail sector saw the largest % fall from 6.5 years to 5.4 on average, followed by offices(5.4 to 4.7 years) and then industrials(4.6 to 4.0 years) but this was also set against a backdrop of increasing incentive packages as Lessors have had to further induce tenants into vacant space.

Not great news for the Landlord/Lessor and generally good news for the tenant community, but as a response to the downturn this is predictable and is evidence that deals are being done and that fewer small businesses are being adversely affected by property constraints in the downturn.

But do tenants really get up and move on when their short lease expires or are they actually using the opportunity to renew with their existing Landlord on the same or better terms? More often than not, if the space still works for them the Tenant stays and renews rather than face the disruption of moving for the sake of modest and debatable savings. Some of the larger Landlords such as MEPC publically state their retention rates (MEPC claim 91%, and are looking to further improve on this) and much of this is down to active management and integration with their Tenants (customers).

So whilst the overall picture is of lease term reductions, many transactions occur between the same leasing parties.

But whilst a Landlord is keen to retain occupancy of his space, the impact of shorter leases is harder felt by an Investor/Developer Landlord who requires longer leases to attract development funding and/or show long term income commitments to valuers. The UK Investment market was the envy of the world for decades by boasting 25 year leases with 5 yearly upward only rent reviews an an Industrynorm, but now, as this Report shows, a Landlord would be fortunate to secure a new lease term even containing a rent review. He may circumvent this issue by negotiating stepped or fixed uplifts and incentive packages to dissuade tenants from exercising break clauses, but the overall message illustrates a potentially more mobile working community with whom Landlords need to engage in order to secure their longer overall retention within a specific building or Estate.




Does Health & Safety benefit your business?

We at TAP are always looking for ways to help organisations and have identified a website operated by the Health & Safety Executive dedicated to explaining how cost effective managing your health & safety is to a small business.


The website is titled ‘Better Business’and the site has been designed to offer general guidance across a number of areas that may have an impact on the working environment of a small business. Each page has a link through to a useful site that provides more information around the subject and,together with their manned Helpline 0845 345 0055,it is a useful number for any business.

Don’t worry if you feel your organisation is too large;the HSE also have a website for larger companies.

If you have any questions regarding Health & Safety and would like to speak to a consultant who specialises in a particular field then please feel free to telephone us on 0800 865 44 50 and we will be happy to refer to one of our Partners.



Question & Answer

Lease Assignment - What is it and how do I go about it?

Assume that your business no longer requires the premises it operates from and is looking to dispose of the lease. You have been unable to surrender the lease and have restrictions on subletting and the only remaining option is to assign (or transfer it) to another company. Selling or transferring a lease is known as ‘Assigning’ and effectively means that you transfer all the current liabilities to another company. It does require your Landlord’s consent and will be conditional on finding a company who is acceptable, in all ways, to the Landlord. However, assigning the lease does not fully remove you from all residual liabilities.

Similar to applying for consent to sub-let a premises,the Landlord will need to be supplied with sufficient information about the new prospective assignee that will support their financial credentials, which will include sight of accounts, various references from accountants, bank and current Landlord. Furthermore they will require comfort in knowing the occupier will not be using the premises for any immoral use or conduct any business that may be seen as a nuisance to other occupiers in the building. It is therefore important to cover these aspects in detail when applying for consent. Depending on when the Lease was granted you may also be required to commit to an Authorised Guarantee Agreement (AGA). This means your business agrees to ‘guarantee’the future obligations of the new tenant.

Once consent has been given and the Licence to Assign, and AGA (if necessary) has been signed by all parties then whilst that tenant occupies the property and meets their financial and leasehold obligations you are effectively released from your leasehold obligations. However, depending on when your lease was granted (Pre or post the Landlord and Tenant (Covenants) Act 1995) then your responsibility may continue and in a circumstance where the new occupier cannot afford or fails to comply with their obligations you will be called upon to ‘step in’and remedy the situation.If Assigning a Lease which was granted before 1995 then your responsibility will continue until the Lease has expired, although should the tenant fail to meet their reinstatement obligations then you may have to meet that obligation. However, if the original Lease was granted after 1995 then there is a possibility that should the company, (who you assigned the Lease to) assign it again, then your future responsibilities may fall away as the Act limits on-going liability. Following a recent case,this release also applies to Sureties who now cannot be obliged to guarantee the performance of the original lease.

Assignment is therefore the effective sale of your lease to another acceptable party and the price(‘consideration’) of that sale is often referred to as a Premium…or reverse premium…dependant upon the level of current rent passing compared to the prevailing market rent at time of assignment;therefore you,as an assignor may actually have to pay to sell your lease if your ‘passing ‘ rent is above prevailing market levels. For further details, call us on 0800 865 44 50.

Do electricity meters measure enough?

Industries and professions across the country are firmly focused on reducing electricity usage, especially with the “cap & trade” CRC scheme which comes into effect in April 2010, but how can you meaningfully measure consumption?

It is safe to assume all buildings will have an electricity meter but what information can it provide? Simply, the information is basic providing just a measurement of units consumed. These days measuring usage is not enough as it is essential for companies to analyse their consumption “profile”. That is to say it is important to understand how the electricity is used and by what equipment. Once you understand this aspect you can then look at:

• Energy wastage – When all usage has ceased is there any equipment which is still on that may consume electricity but which is not required?
• High consumption data – When and what causes it? Is it necessary?
• Weather patterns – How do they influence usage?
• Benchmarking – Monitor regular usage and maintain a steady usage.

Larger users (where peak demand of electricity is above 100kW) will already have half hourly meters and the supplier company will be able to record usage every 30 minutes. However this data doesn't have any details attached to it so you can not record the consumption of individual items of equipment.  As a result more meters will need to be installed to measure the consumption of individual pieces of equipment such as pumps, chillers, lighting circuits and so on.  This will aide transparency of usage. The new “smart” meters will give more information to allow proper strategies to be adopted to reduce unnecessary energy consumption, and landlords are now moving towards installing this equipment. Hopefully savings will come from better use of this expensive commodity.

The Green Lease Cometh....

As a conscientious EU Member state, the UK Government is obliged to implement all Directives issued and
commercial property occupiers are becoming subject to more and more EU and UK red tape with regard to Environmental objectives and how their use of commercial space affects carbon emissions and the knock-on effects thereafter.

We are becoming increasingly aware of Energy Performance Certificates/Display Energy Certificates that have emerged from the Energy Performance of Buildings Directive 2003 and now the Government's proposals for Carbon Reduction Commitment (CRC) from the Climate Change Act 2008, as just 2 examples but there is now an emerging trend for the Landlord and Tenant relationship to enshrine responsibilities and obligations towards better Environmental behaviour within the body of a Commercial Lease agreement.

The model for such a move has come from Australia where 8 Green Lease Schedules have been encouraged to be adopted in new leases which deliberately place burdens on both Landlords and Tenants to undertake certain measures; compliance by a Tenant, for example can be financially rewarded in terms of Service
Charge reductions, and should a Landlord fail in his obligations he could find a Tenant withholding Rent until matters are corrected.

The general thrust of all of this is to reduce energy consumption and improve efficiency, by-products of which can include assisting Business performance, improve Corporate image and help meet the CSR requirements of both parties. UK bodies such as The Centre For Research In The Built Environment (CRiBE, http://www.cribe.co.uk/) and The Better Building Partnership (BBP, www.lcca.co.uk) have both issued Guidance and the BBP, in particular is suggesting a set of principles and guidelines for a partnership approach rather than actually being prescriptive about actual Lease clauses. 

Owners and Occupiers can therefore agree which principles can be adopted in individual circumstances. They believe that collaboration is best documented in a legally binding and transferable Memorandum of Understanding (MOU) which can implement best practice recommendations into new leases and a set of
principles adoptable into existing lease agreements. 

The MOU should at least consider the sharing of data for Energy Efficiency, establishment of a Building Management Committee and cooperation on reduction strategies. Other general headings to be incorporated should include Water and Waste Efficiency, Service Charge (green rewarding benefits), fit-out and refurbishment, onsite renewables and CCHP, reinstatement and dilapidations, Managing Agents 'green' duties, transportation initiatives, inter alia.

One leading UK Asset Manager, Hermes,(http://www.hermes.co.uk/) has taken the Sustainability issue to the core of its UK business and believes that through Responsible Property Investment(RPI) it can both protect and enhance the value of its assets and this is now further reinforced by Research from the RICS (www.rics.org) which suggests for the first time that Green Rated buildings in the USA attract a higher market premium when being sold, than those without.

Clearly a benefit for Landlords/owners but it is clear that a trend is emerging linking value to behaviour and Landlords will need to offer up benefits to Tenants for 'green' activities if it can now be shown that Capital value can be gained upon Sale by so doing. If the Landlord gains, then Green leases should offer up Tenant
benefits too.

The Cost of Carbon Compliance is coming......

Last year the Government passed The Climate Change Act 2008 and this piece of legislation now requires those responsible for the purchase of electricity (in most cases Landlords) to buy Carbon Credit Allowances which will match the amount of CO2 emitted as a result of the use of this power. The regulations will capture those who use more than 6,000mwh per annum (approximately £500,000 per annum). This scheme is known as the Carbon Reduction Commitment (CRC) and obligatory and begins in April 2010. Those companies who meet and exceed the 6,000mwh criteria are currently being requested to register as "participants" within the scheme. This request involves declaring data collected from meter readings (half hourly data) and along with details of the property ownership, this information is used to forecast the "participants" usage and subsequently calculate the number of Allowances they will need to purchase for the period April 2010 - April 2011.

Although the scheme begins in April 2010 the "participant" will not need to pay for these Allowances until April 2011 when they will be required to buy Allowances for the period April 2010 - April 2011 and April 2011 - April 2012.

It is the Government’s intention for the cost of administering this scheme to be met by the Landlord.  However, the Landlord will look to the terms of the lease to recover the costs of these Allowances from the Tenant and so companies should begin budgeting for increases in the their service charge contributions. This new legislation will apply pressure on the property owner to rein in the amount of energy they use and as a result the need to measure usage will be at the forefront of how this is done. 

Landlords across the country who are recording their energy usage on a half hourly meter, and who fall within the annual £500,000 spend on energy, will be sent packs to register themselves as a “participant” in the scheme and although a property owner may register himself as a “participant” in the scheme it is not certain whether they will inform a tenant of their application. This is a self certification scheme and non compliance will receive a strict financial penalty and any participant not complying will be named and shamed.  Consequently a property owner will be under a strict obligation to comply. A tenant may wish to make his own enquiries of the managing agent or property owner to understand the financial implications of being involved in such a scheme, but the confusion may result in limited information being available.

Prudent Landlords will be adjusting their service charges and adding the certificate costs to the Energy Categories as of now and tenants should be wise to this and begin setting aside monies to meet this increase in their service charge budget. There is one good piece of news and that is should a landlord consume less electricity than the number of certificates purchased then a rebate will be made in the following October (2011 being the first). Be careful to monitor what your Landlord is doing and if in doubt ask questions.