#AskTDS: “Does my tenant’s deposit cover unpaid utility bills?”

In this week’s #AskTDS blog, we answer a landlord’s question: “Does my tenant’s deposit cover unpaid utility bills?”

The answer to this question depends on the responsibilities outlined in the tenancy agreement.

The tenancy agreement should state whether it’s the tenant’s responsibility to transfer the utility accounts into their name and clearly explain the tenant’s responsibility to pay the utility bills.  In this case, if the tenant has failed to pay the utility bills by the end of the tenancy, it will remain their responsibility to settle the debts.

If the utility bills are in the tenant’s name and they do not pay them, the debt will follow them as the bills are not tied to the property and therefore may not be deducted from the tenancy deposit. However, if the utilities are in the landlord’s name and the tenant leaves an unpaid debt, the value could be subject to a claim against the tenancy deposit to cover the costs.

When leaving a property, a tenant can sometimes ask for services to be disconnected rather than notifying the supplier that they’re moving. In these cases, there may be an additional cost to the landlord to reinstate supply which could be recouped from the tenancy deposit.

There are some instances where there are regional variations to be aware of.  For example, when outlining the tenant’s responsibility in relation to council tax, it is worth checking if the local authority collects council tax during void periods.  Each local authority has different regulations regarding this, so it’s best to check with them directly.  You may need to adapt the utility responsibility clauses in your tenancy agreement in line with these regulations to ensure that there is no confusion.

Service and block management charges are another common cause of uncertainty.  The tenancy agreement should clearly set out where responsibility lies for these expenses.

TDS has prepared some guides to help you with bills and fees.  You can find them here.

About TDS

Tenancy Deposit Scheme (TDS) is a Government-approved scheme for the protection of tenancy deposits; TDS offers both Insured and Custodial protection and also provides fair adjudication for disputes that arise over the tenancy deposits that we protect.

We provide invaluable training in tenancy deposit protection and disputes for agents and landlords through the TDS Academy as well as joining with MOL to provide the Technical Award in Residential Tenancy Deposits.

TDS Insured Scheme: where a TDS member can hold the tenancy deposits as stakeholder during the term of the tenancy.

TDS Custodial Scheme: where TDS hold the deposit for the duration of the tenancy.

TDS Academy: TDS provides property professionals with invaluable training in tenancy deposit protection and tenancy deposit disputes.

TDS Northern Ireland: TDS is Northern Ireland’s leading and only not for profit tenancy deposit protection scheme.

TDS can only comment on the process for our scheme, other deposit protection schemes may have a different process/require different steps. Content is correct at the time of writing.ARLA|Propertymark: For agents who would like to stay up to date, you can contact Propertymark | ARLA at: join@propertymark.com. By being a member of Propertymark | ARLA you will be eligible for TDS Insured best headline rates.

RLA: If you are a landlord and would like to keep up to date with any changes that may affect you or your responsibilities, you can contact the RLA at: info@rla.org.uk and quote reference: dg715 to receive 25% off your first year’s membership.