A PUBLIC CONSULTATION has been launched to determine ways to ensure rented properties are made warmer and more energy efficient. 

Environment Minister Richard Bruton today announced a consultation around options to encourage energy efficiency upgrades in rented properties. 

The government’s Climate Action Plan commits to upgrading 500,000 homes to a BER (building energy rating) of B2 or cost optimal energy.

It is estimated that around 21% of private rented accommodation have a rating of F or G, according to the government.

Oftentimes, rented properties, especially older rented properties, can be less energy efficient than owner occupied properties because of the “split incentive problem”. 

A split incentive happens because landlords, who would have to meet the cost of the improvements, do not reap the benefits of a warmer home and cheaper energy bills. 

Tenants, on the other hand, do not own the property and therefore have little incentive to invest. So, it can happen that neither party is motivated to upgrade the building. 

As a result, tenants’ heating bills can often be higher than they could be and more energy is used, resulting in higher emissions. 

“We must address this issue,” Bruton said. 

“Today, we are outlining a number of options to address the problem. Improved properties will be welcome for tenants and landlords alike because they will result in improved living conditions, better health outcomes and enhanced asset value,” he said. 

“The environment impact will be significant, with lower energy bills and lower emissions.”

Green leases

One of the options outlined in the consultation open from today is to encourage a wider use of green leases. 

A green lease is basically a normal commercial lease with additional green clauses included. 

These facilitate and or encourage cooperation between the landlord and
tenant to achieve beneficial environmental outcomes.

Green lease clauses are already applied to some extent in Ireland. 

Green clauses might, for example, provide: 

• That it is the intention of the landlord and the tenant to promote the reduction of emissions. 
• That the tenant may, with landlord’s consent, carry out alterations which will improve the environmental performance of the premises. 
• That tenants shall not carry out any repairs/modifications which would adversely affect the energy performance of the building. 

The public consultation will also consider the introduction of an enhanced grant for landlords who upgrade their rented property and their own home at the same time, provided both properties are brought up to specified BER standards. 

It will consider linking the participation by a landlord in the Housing Assistance Payment scheme for a defined period of time to a free energy efficiency upgrade. 

The introduction of regulations requiring all commercial buildings to obtain a minimum BER by a specified date in the future will also be considered. 

Furthermore, the consultation will consider introducing a cost balancing arrangement, whereby a landlord unable or unwilling to upgrade to minimum BER standard compensates the tenant for higher heating bills.

All options will be put out to consultation from today. It will remain open until 17 January 2020.