July 23, 2014 4:08 pm

House Rules: property law and HS2

Latest compensation proposals, and energy certificates for German property
James Ferguson illustration©James Ferguson

1. HS2 – Latest compensation proposals

I’ve heard the latest consultation on compensation for the HS2 Rail Line is out. Is there anything new? The consultation covers a cash alternative to the voluntary purchase scheme and a homeowner payment scheme designed to share the economic benefits of HS2 with rural homeowners. Both were announced in April but this is the first real chance for the public to comment.

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Is there an easy way to work out which of the schemes I might qualify for? The government has published some useful new resources alongside the latest consultation. There is a fact sheet summarising the various compensation schemes and a series of map books showing the proposed route in detail. Each compensation scheme relates to a specific geographical area and the map books show the various zones in different colours.

Will I still get compensation if the line near my property goes through a tunnel? No. The compensation schemes are all limited to areas where the line will run above ground.

Could I end up claiming under more than one scheme? That’s possible, if your property falls partly into one zone and partly into another. And if you suddenly find you need to move but have already accepted the alternative cash offer or a homeowner payment, you could still apply for the “need to sell” scheme.

So I might get double compensation? Unlikely. The government wants to avoid “double counting” and is considering how best to recover money paid out under the alternative cash offer or homeowner payment schemes if it ends up buying the property under the “need to sell” scheme.

How soon will the new schemes be available? The alternative cash offer will be launched alongside the voluntary purchase scheme, at the end of 2014, and will be open until one year after the line opens.

And the homeowner payment? That’s a bit different. If the HS2 Bill is approved by parliament and becomes law, the government plans to start making homeowner payments as soon as possible. The scheme would remain open until one year after the line opens but the levels of payment will be fixed at the outset and the government does not plan to increase them in line with inflation. Eligible homeowners will have a clear incentive to claim as early as possible.

How long do I have to comment? The consultation closes on September 30.

2. Energy certificates for German property

My family owns a portfolio of residential and commercial properties in Germany. It looks as though the property market is slowing down, so we are thinking of selling. Will we need any sort of energy performance certificates, like we do in the UK? Yes, you will. New Energy Conservation rules came into force in Germany in May 2014. Anyone selling or letting a property must make a valid Energy Performance Certificate (EPC) available when potential buyer/tenants are viewing. Depending on the type of EPC you have, it will show either the energy demand or the energy consumption for the property. Newer certificates will also give residential property an energy efficiency category. You will have to hand over the original certificate (or a copy) to the actual buyer/tenant when the deal completes.

Even though they’ll already have seen the certificate at the first viewing? Yes – you have a separate obligation to hand over the document. Legislators wanted to make sure there was no way for sellers to get round the disclosure of energy requirements and they’ve done a thorough job.

Can we still put a clause in the contract saying that the buyer waives its right to an EPC? No. You could sometimes get away with that in the past but not anymore.

But can’t all this wait until the first viewing? Not really. If you place an ad in any commercial media, you now have to include certain information: the main energy source for heating the property, together with details of the type of certificate and the energy demand or consumption the certificate shows. For residential property, you also have to include the energy efficiency class (if one is given in the certificate) and the year the property was built.

How do we get a certificate and how often do we have to renew it? Only accredited assessors can issue EPCs. Once issued, the certificate will generally be valid for ten years.

That sounds like an awful lot of paperwork. What happens if we don’t comply? Failure to comply with any of these obligations will be an “administrative offence”. You could be fined up to €15,000 for each offence. You could also be liable if the information in the certificate turns out to be wrong, even though you didn’t issue it yourself. In practice, people are starting to include disclaimers in sale contracts and leases, to protect themselves.

The whole thing rings a bell. Isn’t it similar to the UK EPC regime? Yes. The EU’s Energy Performance of Buildings Directive (EPBD) is part of a larger framework with ambitious targets to reduce Europe’s energy use in the not-too-distant future. EU member states must implement the EPBD through their domestic law. Since EU directives don’t dictate how member states achieve the end result, the rules may look different from state to state, but ultimately we‘re all in the same boat.

Lukas Weidner is an associate in Frankfurt and Fiona Larcombe is a solicitor in London at King & Wood Mallesons SJ Berwin

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