Buying with a 'Green Deal Debt' Help..

maxtuuuu

Hello everyone!
I have had the final report through on a house i am in the processing of purchasing, but just found out the vendor has a green deal debt on the energy bills.
Where do i stand with this? Are they liable to pay off the debt before completion as after all they have had the works carried out..?

If anyone has been in the same situation can you please advise on how you resolved the issue?

Many Thanks
Max

anselld

They are not "liable" as such; by default the debt will stay with the property. You can ask them to pay it off or you can reduce your offer to take account of it, but they might refuse. It is all negotiable.

Green deal is a nasty piece of work with a rather high interest rate in hiding. You would be correct to avoid it.

argomatt

I looked into doing works under green deal but decided against it because I plan to move fairly soon.

How it's supposed to work is that the debts transfer to the new owner, and are collected with their utility bill.

This is because the new owner continues to benefit from the efficiency improvements and reduction in energy costs (which should be less than the debt repayments)

But I was worried that taking on these debts might put off potential purchasers or affect the price I could get for the property so decided to leave it, new owners can decide to have the works done if they want to.

argomatt

I looked into doing works under green deal but decided against it because I plan to move fairly soon.

How it's supposed to work is that the debts transfer to the new owner, and are collected with their utility bill.

This is because the new owner continues to benefit from the efficiency improvements and reduction in energy costs (which should be less than the debt repayments)

But I was worried that taking on these debts might put off potential purchasers or affect the price I could get for the property so decided to leave it, new owners can decide to have the works done if they want to.

maxtuuuu

anselld wrote: »

They are not "liable" as such; by default the debt will stay with the property. You can ask them to pay it off or you can reduce your offer to take account of it, but they might refuse. It is all negotiable.

Green deal is a nasty piece of work with a rather high interest rate in hiding. You would be correct to avoid it.

Think this will be the way to go. And just when i thought everything was going smoothly this pops up! Im a first time buyer so everythings new to me!

I take it they will be able to supply paperwork with the remaining balance owed?

Thanks for your replies also.
Max

agrinnall

The point of the green deal loan is that the payment of the loan should be offset by the savings made in energy consumption from having had the work done. It therefore doesn't cost the owner (old or new) anything. Of course, that's the theory, whether it works in practice is probably something only the owner at the time the deal was taken out will know.

anselld

agrinnall wrote: »

The point of the green deal loan is that the payment of the loan should be offset by the savings made in energy consumption from having had the work done. It therefore doesn't cost the owner (old or new) anything. Of course, that's the theory, whether it works in practice is probably something only the owner at the time the deal was taken out will know.

Except that the potential new owner walks in, sees a shiny new boiler, double glazing or whatever and makes an offer on that basis. Then, as the OP, discovers that the shiny new stuff is not bought and paid for but instead remains dead-albatross-like as a high interest debt still to be paid ( via higher energy bills).

Vendor/EA will no doubt claim the OP should have read the small print on the EPC where I think it is declared. None the less I would certainly be changing my offer if the green deal had not been made 100% clear by the vendors prior to offer.

anselld

maxtuuuu wrote: »

I take it they will be able to supply paperwork with the remaining balance owed?

Yes, they can request a repayment figure from the green deal provider.

Good luck, let us know how it goes!

Better_Days

The Green Deal has been very unpopular but here is some info from MSE
http://www.moneysavingexpert.com/utilities/green-deal

Bear in mind it may affect re-sale

dimbo61

Say you went to see a really nice house with New bathroom and Kitchen and the owner said oh Yes we have a new kitchen and bathroom but still have £15,000 outstanding on a loan !!! Would you expect to pay ?
Green Deal is dying in the water and you must have the loan paid off before you will complete.
Vendor, estate agents and vendors solicitor should have informed you before you spent money on searches, surveys etc

maxtuuuu

dimbo61 wrote: »

Say you went to see a really nice house with New bathroom and Kitchen and the owner said oh Yes we have a new kitchen and bathroom but still have £15,000 outstanding on a loan !!! Would you expect to pay ?
Green Deal is dying in the water and you must have the loan paid off before you will complete.
Vendor, estate agents and vendors solicitor should have informed you before you spent money on searches, surveys etc

I totally agree. So if you were in my position where would you go from here?
Make estate agents and solicitors aware of the issue plus fact it hasn't been mentioned until now.. and ask for statements showing remaining balance still owing?