Hi, while my tenants were staying in my flat heating bills were not generated due to some tariff issue between the property management company and the billing provider. Now when the bill has been finally generated (it’s under the tenant’s name) those tenants have moved out. Even though I got the account updated to those tenants (when they moved in), the account is ultimately attached to the flat and owned by me.
I have reached out to the tenants to clear the bill, but they have not responded. I am thinking of taking them to small claims court as the outstanding amount is around £500. Any suggestions whether that’s a prudent move?
The contract is the standard AST one generated by Openrent where tenants are liable to pay the bills.
If the bill covers the period they were renting, you simply tell the energy company that and put your feet up. It’s their job to chase them for payment, not you at all.
We once had stopped meters (who knew that was a thing?!). Tenants paid no electricity bills for two years!! No one ever queried it until i spotted that a checkout Inventory had exactly the same readings as the check in! Energy company didn’t charge anyone anything.
The big risks with non-payment of utility bills are:
Supplies being cut off, in which case I believe the landlord would have to pay the reconnection charge. I read a post about that recently where someone had done a rent-to-rent letting and arrived by chance at the same time as the gas engineer.
Compulsory installation of pay-as-you-go meters, although I suspect that many tenants expect these nowadays so it’s only a problem when the property is sold - I’m guessing it would be a big problem then, is that right?
My tenancy agreements entitle me to see evidence that utility bills are being paid. I like to check that every 90 days when I do my inspection for the insurers.
I didn’t think energy supplies could be cut off in the event that the tenant hasn’t paid and then moved out. What if the new tenants moved in and are paying their bills correctly? Even if the property was empty after the non-paying tenant moved out, would the energy company penalise the landlord when they weren’t responsible for the unpaid period? It would be the energy supplier’s responsibility to chase the tenant for payment.
Re compulsory installation of PAYG meters, can landlords compel tenants to do this? I thought energy suppliers weren’t allowed to install these unless they meet certain criteria anyway?
@perrygrovefarm the situations you describe wouldn’t apply if the utilities have been switched into a LL’s name at the end of a tenancy. In fact, they are examples of why it is good practice to do so.
I’m intrigued by you checking utility bills. Would you be able to share the clause in your TAs that entitle you to this?
Yes supplies can be cut off. Here’s an example (from a rent-to-rent letting but that doesn’t make any difference):- But here comes the fun part. Serco moved out, I took meter readings and set up the utilities ready for my students. However, at the end of November, the door was forced open by a bailiff who had a warrant to remove the gas and electric meter and replace it with a prepayment – all due to non-payment. After spending all day back and forth on the phone – it turns out Scottish Power has NEVER had one payment from Serco for ANY utilities!!! The bill was over £5k. And in order to stop the meters from being swapped – they required the payment today. Straight away I got on the phone with Serco and after a few promises of this would be sorted the bailiff didn’t get paid and conducted the swap.
Source: search for ‘Serco contract was a train wreck!’
I agree this isn’t a risk if all goes as it should, the tenant pays the bills, meter readings are agreed on vacation, and the landlord pays during the void period. But I thought we were discussing what happens when things go pear-shaped.
And here’s the relevant clause from my standard AST:-
6.3 Utilities and other supplies:|
1.The tenant will pay for a television licence for the premises until the tenant has vacated them.
2.The tenant will pay to the relevant suppliers and authorities (or will reimburse to the landlord if the landlord pays on the tenant’s behalf) all charges made for water, drainage, electricity, gas, telephone, internet, and all other services and supplies to the premises including standing charges (to be apportioned if necessary) for the fixed term and any additional time during which the tenant occupies the premises.
3.If any service or supply is disconnected or discontinued because of the tenant’s actions or default the tenant will pay the cost of reconnecting or recommencing it.
4.The tenant will not arrange for the connection of any new service to the premises without the landlord’s prior permission and will not allow the installation of any “smart” or pre-payment meters.
5.The tenant must not sign any document which relates to the Green Deal or any other obligation that binds, runs with, or otherwise affects the premises rather than the tenant personally.
6.When the landlord carries out routine inspections the tenant will allow the landlord to see the most recent utility bills for the premises and evidence that they have been paid.
Yeah rent to rent comes with its own level of opaqueness for anyone embarking on it.
Hope you’ve got council tax covered in another clause.
How do tenants typically respond to that clause? What happens if they persistently fail to present those bills/proof to you? Are there grounds to issue S8 for not doing so? Would you do so?
Apologies - my last post took the wording for the utilities clause from an old version of my AST agreement. My current version is below with the changes in italics. The binder mentioned in 6.3.7 is something we introduced a few years ago. It’s a lever arch binder which is kept in the property and in which all the tenant’s copies of documents are stored together with instruction books for the boiler etc. I was finding that tenants would lose things so now everything is kept in one place and I always look at it when I do my 90 day inspection for the insurers. Also, yes, I have a separate clause for council tax which includes " any other tax, assessment or outgoing of a similar nature". So far as seeing the documents is concerned I’ve never had a problem, and I’ve never troubled myself with questions about what to do if tenants refuse to let me see the bills, because I don’t think that will ever happen. This is because we take infinite care over selection of tenants and we build up a relationship of trust. When we sit down to go through the tenancy agreement together prior to completing it incoming tenants are told why I will want to see the bills and this has never been challenged. Of course it’s increasingly the case that paper bills aren’t used any more so then I have to look at them on the tenant’s phone, but that hasn’t been a problem either.
6.3 Utilities and other supplies:
1 The tenant will pay for a television licence for the premises until the tenant has vacated them.
2 The tenant will open accounts in its own name and pay to the relevant suppliers and authorities (or will reimburse to the landlord if the landlord pays on the tenant’s behalf) all charges made for water, drainage, electricity, gas, telephone, internet, and all other services and supplies to the premises including standing charges (to be apportioned if necessary) while the tenant occupies the premises.
3 If the tenant changes suppliers it must inform the landlord immediately.
4 If any service or supply is disconnected or discontinued because of the tenant’s actions or default the tenant will pay the cost of reconnecting or recommencing it.
5 The tenant will not arrange for the connection of any new service to the premises without the landlord’s prior permission and will not allow the installation of any “smart” or pre-payment meters.
6 The tenant must not sign any document which relates to the “Green Deal” or any other obligation that binds, runs with, or otherwise affects the premises rather than the tenant personally.
7 Any documents relating to the above must be placed in the binder.
8 When the landlord carries out routine inspections the tenant will allow the landlord to see the most recent bills for the premises and evidence that they have been paid.
In answer to the original question you are not responsible for debts that tenants accrue, but the aggravation from the constant threatening letters and visits from debt collectors is very draining.
Wow, checking tenants utility bills that seems a horrible invasion of privacy I wouldn’t want it done to me especially every 90 days.
It doesn’t matter what you put in a contract, a rotten tenant can just ignore it. Our bad tenant had pay as you go meters, as he ran up debts everywhere. (Incompetency not wickedness) We were unaware until we had evicted him. Scottish Power were awful, just getting through to them on the phone was enough to drive me barmy. Adding SP’s total incompetence to that, made it a very tough 5 months getting the prepaid meters removed (it should only take 14days) They ended up compensating me twice but I don’t feel that covered the financial losses and stress.
There are a couple of clauses that I think would be worth reviewing there:
You might want to amend clause 1 to make it clear that the licence is the tenants responsibility if and only if its required. As it stands, it appears to breach the Tenant Fees Act.
In clause 2, I’m wondering if “while the tenant occupies the premises” ought to be “for the duration of the tenancy”. The tenant might otherwise leave early and be off the hook. I also note that there is no mention of Council Tax in the list.
I think that clause 8 might be unenforceable if bills are in the tenants name as the landlord would then have no liability.
TV licences are not a ‘contract with a third party…for the provision of a service’, they are a licence, see Communications Act 2003, Part 4, s.363.1, so they are not caught by s.1(3) Tenant Fees Act 2019. Also they are a permitted payment, see TFA 2019 s.3(1), also Sch 1 para. 10(1)A in which the words ‘if the tenancy agreement requires the payment to be made’ clearly contemplate making such a payment compulsory. However I might amend 6.3.1 so that it reads ‘Payment for a Television Licence is the tenant’s responsibility.’
If the tenant leaves early I suppose you are thinking of the “deemed contract” provisions in the Electricity Act 1989 Sch.6 para. 3.1 and the Gas Act 1986 Sch.2b, para 8.1. and I agree this is a risk although probably very small because there are usually warning signs that a tenant is going to leave. I have been more concerned about ensuring the tenant is responsible for utilities if they don’t leave when they are supposed to. What wording do you use for this?
So far as the enforceability of clause 6.3.8 is concerned tatemono was making the same point but I don’t think the inability to enforce is sufficient reason to dispense with something which might one day prevent a nasty surprise because a utility company has installed a pre-payment meter without me knowing anything about it until afterwards. See the reference to the Serco experience I mentioned above.
Good point about the licence not be caught by the Tenant Fees Act. My mistake.
With the utilities, I was thinking more that by limiting the payment to the period they occupy, they have a contractual get out of paying if they leave early, (or indeed never move in at all).
I agree with the general point you make here, which is that unenforceability is not necessarily a reason to not include something in the TA, which also serves to set your expectations of the tenancy. I have included some such in my own agreements. However, I believe that the bill payer has a legal right to request a different meter without the consent of the owner, so I’m not sure it would prevent surprises there.
I agree. The risk of meters being changed worries me as we gradually wind down our portfolio and think all the time about preserving the capital value of the properties. I have no idea how hard it would be to get a pre-payment meter changed back to an ordinary meter but I’m pretty sure that most prospective purchasers would be very unhappy to buy a house with the former.
As to unenforceable tenants’ obligations I’ll play devil’s advocate and say that I can imagine a hostile judiciary making life very difficult on an application for a s8 eviction if the “tone” of the tenancy agreement appeared too onerous. So there is a judgement to be made about what to put in these things and what is better left out.
