In this week’s #ExpertView, John King, Head of Member Services at TDS, gives us some best practice tips for landlord regarding utility bills.
Landlords should be aware that they could be liable for any unpaid utility bills and even reconnection fees if they don’t correctly manage the end of tenancy process with regards to key utilities. Here is our latest guide to ‘best practice’ regarding tenants’ utility services to help you have a successful tenancy.
Who is responsible for paying utility bills?
‘Who pays’ firstly depends on what your tenancy agreement says, although tenants are usually responsible for paying utility bills, if they do not pay, the landlord may find themselves liable for the bills if the tenancy agreement doesn’t clearly assign responsibility to the tenants. To avoid this, landlords should include a clause in the tenancy agreement that clearly states who is responsible for paying which utility bills during the tenancy. If there are communal services, such as heating or hot water you may need to apportion the tenants element upfront to ensure it doesn’t get forgotten about, especially if the tenancy agreement is causing confusion as this may disadvantage a landlord’s ability to get recompense.
Some landlords choose to include utilities in the rent, if this is the case, the landlord may be responsible for paying all the utility bills that are included in the rent.
When do the tenants become responsible for the bills?
If tenants are paying for utilities, they are responsible from the start date of the tenancy. To ensure accurate invoicing, a meter reading should be taken on the day that the tenants move in to their new home. In the excitement and stresses of moving day, tenants may forget to take a meter reading. Therefore, we recommend that it be included as part of the check-in process and recorded on the inventory. Remember to cover off who informs the utility provider in your tenancy agreement.
In whose name should the utility bills be in?
If the tenant is responsible for the cost of the utility bills for the duration of the tenancy their name should be on the utility bill. Should they move with money outstanding on the account, utility providers sometimes try to seek payment from the landlord. We recommend you notify utility providers at the end of the tenancy with a final meter reading and a forwarding address for the tenant.
If you are including the utilities in the rent, the bills should be in your name.
If there is a void period between tenancies, who is responsible for the utility bills?
If the property has no tenant, then the landlord becomes responsible for all utility bills. You can lower the cost of the bills by ensuring the heating is not used often – although we don’t advise turning it off completely in winter or you may end up with frozen pipes. If your property is unfurnished you can also contact your local authority and apply for a reduced council tax bill for up to six months while the property is empty. We recommend that when you call up the utility providers at the end of the tenancy, you have all bills transferred into your name.
The landlord is responsible for all utility bills between tenancies. Bills should be in the landlord’s name during this time.
Can the tenant change utility supplier?
Yes, as they are responsible for the payment of utility bills and they are the utility customer they are entitled to shop around for a better price. However if they switch to a pre-paid meter they may need to seek the landlords written permission, they should return the property with the original type of meter when they leave. If the landlord must pay the utility company to reinstate the original type of meter, the cost of doing so may also be the subject of a dedication from the tenancy deposit, providing the tenancy agreement allows for it.
These are some of the best practices for utility bills; however there may be situations where these don’t apply. If you are concerned about utility bills you can seek advice from your utility provider, local authority or form the Citizen’s Advice Bureau (CAB).
For more landlord tips please view our landlord FAQ page.
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.
These views are those of the author alone and do not necessarily reflect the view of TDS, its officers and employees.
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.
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