Tenancy inclusive but unpaid utility bills and section 33

Rent inclusive of utility bills

I’ve had a spate of cases in the past few months .

Landlords paying the utility bills and charging rent inclusive, then getting the hump over what they felt was their tenant’s excessive use of supplies and transferring the bills into their tenants’ names without their knowledge or consent.

Quite why they were hanging onto the responsibility for the bills in the first place is a question in itself and I noticed in each case that the properties involved should have been licensed but weren’t, so I presume that the idea was to provide some form of proof that it wasn’t rented out, should the council come a knocking.

And it has to be said, quite why utility companies start up fresh accounts in this way is another mystery but there you go.

One of the things I have noticed over about the past 7 or 8 years is an increase in lettings where the landlord is responsible for bills, even in self-contained accommodation, a situation unheard of back in the day.

Rent inclusive set-ups used to be the sole preserve of large house shares, not the self-contained market.

Why the increase in these set-ups?

One reason is the explosion in dodgy landlords using stolen meters and fake supplies, which I have written about elsewhere, but you can read it here.

But what can be done when the landlord is responsible for gas and electricity and they have been or are about to be,  disconnected for non-payment?

The fact is, in such circumstances, the local authority does have powers to step in and pay off other people’s bills.

Enter section 33

It’s an old solution, oft forgotten about and usually unknown to newer recruits to housing advice world, the dreaded Section 33 of the Local Government (Miscellaneous Provisions) Act 1976.

Read about it here if you’ve got a mind, but essentially, where a landlord is responsible for paying utility bills and failure to pay threatens supply or has already caused disconnection, the authority has the ‘Power’ (not duty thank God) to pay the outstanding amount and claw back the money from the tenants rent payments.

Simple on paper – but in reality?

Kickstarting the process is the easy bit. The tenant has to notify you in writing that they authorise you to do it. Why wouldn’t they? They’re sitting in the dark.

Then the fun starts.

You have to talk to someone in an energy supplier call centre and explain that you want them to provide information on an account that you are nothing to do with.

It usually takes about 5 explanations before what you are trying to do even has any effect on their communication skills, when it doesn’t come up as a topic on the script of their computer screen, at which point the response is usually a complete shutdown and refusal to discuss with you as you aren’t the account holder.

So then you have to get shirty and ask to speak to their supervisor, who you have to explain it all to another 5 times while they read through their script before refusing to discuss it with you for the same reasons.

At this point I usually emphasise that we are about to pay them £2,000 or whatever, as soon as we have the payment details and confirmation, at which point they usually say:-

“S….S…Sorry…………..who are you again exactly?”

and you have to start all over again.

Maybe, with persistence and luck, you get through to someone else on a different pay grade and they agree on a plan that will settle the account, as long as they have the written permission of the utility account holder.

At this point, you have to explain that this won’t be possible because they aren’t cooperating and the principle of snakes and ladders kicks in and you have to start all over again with someone else.

Days have gone by, as have countless phone calls to goodness knows how many departments before someone agrees to provide the details you need to make the payment.

Don’t cheer yet though

All you did was batter the utility company into submission, now the real fight starts, having the same conversations with the council’s own finance team to actually raise the payment.

“S….S…Sorry…………..who are you again exactly?”, goes the first round of conversations, swiftly followed by:- 

“So let me get this straight. The council is paying an outstanding bill for some private tenants because their landlord has not paid them?” Said in a disbelieving and condescending tone.

As with the utility companies you have to get shirty and speak to more supervisors. By now it’s a week later.

I always found that this can only be untangled by calling on what councils do best. Hierarchies. You get an understanding senior manager in housing enforcement to talk to their pay grade equivalent on the finance team.

To be fair to them, you have to understand that all teams and services sit under different directorates, who all have their own budgets, so what is being asked for is that Finance uses their budget to pay to resolve a legal problem for housing enforcement.

I mean, would you pay someone else’s debt? Which is what is being asked.

Even if an agreement is reached finance face a mammoth task in setting up an unheard of payment system through which the tenants can pay their rent to the council to recover the money. As with anywhere these days, all systems are computerised and coded and there usually isn’t a code for this kind of arrangement.

The last time I did one of these I kicked up merry hell and put several noses out of joint before the finance team cleared the debt. Then because the computerised system wouldn’t allow them to set up a way of recovering the money it never got paid back.

So its all very well having powers like section 33 but in practice, it’s virtually unworkable.

What worries me

Is that the possibilities for using them are coming back at us in the form of the increase in such arrangements among some rogue landlords.

If they are to be a useful and workable solution that doesn’t leave people sitting without heating or hot water for a couple of weeks then we need to connect this up.

Local authorities at the strategic level, need to work out a protocol with utility suppliers that cut through all this nonsense and enables s33 to be used swiftly and effectively. It needs to be on the script in call centres and finance teams need to create a payment code system that enables them to make the payment and receive the money back from the tenants.

It’s doable, it just takes the will.