Energy-Saving Legal Considerations for Landlords

In the current property market, property owners are looking to their assets to see how additional income can be generated without significant cost.

One option is the lease of roof space for the installation of micro generation technology, such as a wind turbine or solar photovoltaic panels, to generate income under the Feed In Tariff (FIT). Below we look at some of the practical and legal considerations for landlords when assessing the suitability of a building for a lease of this nature:

Where will the technology be sited and how will it connect to the National Grid?

The landlord needs to understand which parts of the building will be affected by the installation, for example where the cables will run, how many meters there will be, and how these will be used, monitored and measured. This highlights a number of legal considerations as I will discuss further on.

How will the tenant get the technology into position?

If a crane is needed, it may have to stand on third party land which will require the necessary consent to be obtained. Also consideration will need to be given to a crane licence. It’s worth noting too that the tenant may need similar on-going access for a crane to carry out maintenance work and as a landlord this may have to be offered on a guaranteed basis.

How will the technology impact on buildings insurance?

The building insurer may need to be notified of the wind turbine or solar panels, in case the changes would otherwise compromise the insurance cover.

Will the proposed installation interfere with existing rights of third parties?

As with any lease of part of a building, the landlord will need to look at (in multi-let buildings) what the existing occupants of the building are entitled to. Consideration must be given to whether neighbouring landowners or tenants have existing rights (whether granted expressly or acquired by prescription) which will be infringed by the proposed lease and/or activities of the FIT generator as tenant.

The landlord may find there are rights for neighbouring buildings to receive light or air across the roof which could be restricted. Or there may be rights for existing tenants, who have equipment on the roof (perhaps air conditioning units or telecoms masts), to access them, maintain them, and receive an unobstructed signal across the roof.

If rights are to be granted over third party land, does the landlord have the necessary ability to do this?

Where it is necessary to place parts of the micro generation technology, such as cables or meters, on third party land the landlord must either already have been granted, or reserved to itself: the necessary rights in terms which permit them to be sub-granted without consent of the third party; or have obtained the consent of the third party to the grant of these rights to the FIT generator, as tenant.

Is planning consent needed?

Planning consent will almost certainly be needed owing to, among other matters, potential noise issues. There were consultations in England and Wales in 2010, designed to explore whether the permitted development rights for microgeneration projects should be extended, but so far there has been no announcement of any changes.

To discuss this, or any other property-related legal matter, please contact our property team on 01772 258321.