Utilities and tenants rights

Housing journalist Samir Jeraj takes a look at the vexed issue of utilities in shared properties

Last time I cast my layman’s eye over the issues of water meters and tenants’ rights.

I promised to return with a post about utilities, HMOs, and other arrangements.

What landlords can do when rent is inclusive

One of the unanswered questions from last time was ‘what happens where a tenant just pays rent inclusive of bills’. My investigations turned up some advice from the CAB, which says if the landlord pays the bill then they can pass on the cost through the rent

However, there is a maximum amount that tenants can be charged for energy under the 2000 Utilities Act  or for water.

Metered v. non metered

One interesting aspect is that, for metered tenants, a landlord can only charge the domestic rate for energy, even if they have a business contract with the supplier.

Where there isn’t a meter, the charge needs to be proportional and the method used to work out the split should be available to tenants.

Bizarrely administration charge for billing or charges for lighting common areas are not subject to legal maximum prices (but must be billed separately).

Speaking from experience

The last time I lived in an HMO a few years ago, I paid a flat rent inclusive of bills.

What this meant was that my fellow tenants had the heating on high 24/7. I would imagine that this meant a massive heating bill for the landlord (well, the agent – we never had an idea who the landlord was).

If they’d given control over to the tenants (and deducted this from our rent) I would hope that we would have looked around, got a good deal, and used the right amount of energy. In theory, we both could have gained.

Tenants’ rights to switch energy provider

If a tenant pays the bills then they can switch supplier. There can be complications e.g. landlords often need to give permission where a tenant is switching away from a pre-payment meter.

Last summer Uswitch released some research showing the picture for private tenants. Some of the headline results paint a stark picture.

• 31% didn’t know they could change supplier (subject to the tenancy agreement)
• 33% said renting made them less likely to think about changing suppliers
• 28% thought that being a tenant makes it more difficult to switch
• 22% said that landlords don’t want to be bothered by tenants about things like switching
• 35% of private renters agree that it is up to them to take control of their household bills but just 16% think a landlord would welcome a tenant trying to secure a lower cost energy deal
• 13% of private tenants wouldn’t even feel comfortable raising it with their landlord
• 35% of private tenants see no point in switching as they won’t be living there long-term

Improving energy efficiency

There’s a similar issue when it comes to improving the energy efficiency of rented housing.

Under law, from 2018 it will be an offence to rent out a property that has an Energy Performance Certificate below Band E.

In 2011, Friends of the Earth estimated that 480 000 tenants lived in homes below this level.

Again, it would be in both the interest of tenants, and landlords to get together to figure out how to make a home energy efficient (tenants who pay energy bills are often eligible for free insulation and other energy efficiency products).

You are better united

So I’d say where it’s possible there’s a case for both landlords and tenants to give tenants control over their utility supplier, and work together to improve energy efficiency.

It may not be easy, but the rewards seem worth it.