Back in July, I wrote about a recent consultation which asked property owners and occupiers for their opinions on how the CRC Energy Efficiency Scheme (CRC) should be treated in leases.
Although the working party that set up the consultation concluded that, on the basis of the responses received, there was insufficient consensus on how to address CRC issues in leases, it did say that it would produce a revised version of the Carbon Reduction Commitment: A Guide for Landlords and Tenants, which it originally published in June 2009.
On 3 September 2010, the updated version of the Guide was published by the British Property Federation. It discusses the following:
1. How the costs of the CRC can be apportioned between landlords and tenants. This is because the CRC Energy Efficiency Scheme Order 2010, which came into force in April 2010, does not oblige landlords to pass CRC costs on to their tenants, or to share with their tenants the benefit of any Revenue Recycling Payments that they receive;
2. Issues that are likely to arise when the ownership of a building changes; and
3. The advantages and disadvantages of four possible methods for incorporating CRC provisions into leases. These include adding the cost of a CRC to the normal service charge; running a separate CRC service charge; charging a levy on energy costs; and leaving the lease silent on the CRC (or specifically providing that the landlord will not require a contribution to its CRC costs from tenants.)
If you have any queries about this, or anything else CRC-related, please contact me at joe.kwok@mablaw.com.