Utilities

The general starting position as to liability for paying utilities, including electricity, gas, water, telephone and internet, is that the occupier or consumer is liable.

However, it is perfectly acceptable for a landlord to agree to pay some or all utilities if they wish. The tenancy agreement terms should clearly state who is liable to pay which utility.

It is common for landlords of shared houses (particularly student lettings) to include all bills with the rent.

Sometimes, the landlord may include and pay bills, but there may be an agreement that the tenant reimburses the landlord for some or all utilities. In this case, the tenancy agreement should be unambiguous of the parties' expectations.

Sometimes, a fair use policy is agreed upon, although it can be challenging to determine what is fair use.

Electricity

If a landlord pays for electricity but then seeks reimbursement from the tenant, the landlord is governed by a ‘maximum resale price’, the same price as that paid by the person who is reselling it, including any standing charge.

When charging a tenant for electricity, the landlord must make reasonable attempts to ensure the cost is based on usage. Still, a tenant can be given an estimated bill in certain circumstances.

More information and guidance on reselling and estimating electricity can be found on the Ofgem website.

Occupier Liability

Under the Electricity Act 1989 (Paragraph 3 of Schedule 6), if no express contract exists, the person occupying and using the electricity is treated as having a deemed contract with the supplier. In practice, this means the occupier is liable for paying the electricity bills unless the tenancy agreement expressly states that the landlord will be responsible.

Water

Like electricity, water charges also have a ‘maximum resale price’. Anybody who resells water or sewerage services (including a landlord) must charge no more than the amount the water company charges them. They are also allowed to charge a reasonable administration charge.

According to guidance for resellers issued by OFWAT:

The administration charge is set to cover administration costs and the maintenance of meters. It can only be charged if it is not recovered by any other arrangement, such as through the rent or mobile home pitch fee. Resellers can recover around £5 each year for those without a meter and £10 for those with a meter. The administration charge applies to each purchaser and not to each occupant.

More guidance for resellers, including what information any bill for water must include, can be found here.

Occupier Liability

Under section 144 of the Water Industry Act 1991, if a landlord-inclusive rent or other arrangement does not expressly cover the water charges, liability generally rests with the occupier of the premises. This occupier liability can be overridden if the tenancy specifies the landlord is responsible, or water charges are included in the rent.

Gas

If the landlord seeks payment of gas from a tenant, like electricity, there is a maximum resale price based on what the landlord was charged. The same guidance as mentioned earlier for electricity applies to gas.

Occupier Liability

Under the Gas Act 1986 (Paragraph 8 of Schedule 2B), if a tenant or occupier is consuming gas without a specific contract in place, a deemed contract arises between the occupier and the supplier. This means the occupier is ordinarily responsible for paying for the gas supply unless the tenancy agreement states otherwise (for example, where the landlord has agreed to include gas bills in the rent).

Heat Network

Where a communal boiler provides heating, hot water or cooling and more than one final customer, any tenant's charge is governed by The Heat Network (Metering and Billing) Regulations 2014 and must be based upon actual usage. The landlord (or the person charging) is known as a “heat supplier”.

According to the Office for Product Safety & Standards (OPSS), the Heat Network Regulations don't apply to shared houses and HMOs:

For a domestic heat supply, a user is considered a final customer where they occupy a partitioned private space intended to be used as a domestic dwelling where it meets all of the following criteria:

• It has a living and sleeping space
• It has sanitary facilities (including washing and toilet)
• It has cooking and food preparation facilities

Spaces that do not meet all of these criteria, such as shared houses with a domestic boiler, houses of multiple occupancy or university halls of residence where some services, such as cooking, are shared, are therefore not considered within the scope of the regulations. In a non-domestic setting, customers are those exclusively using a partitioned space.

Under the regulations, there is a duty to notify Regulatory Delivery (RD) with information about the heat supplier, the location of the communal heating and other details about the dwelling and heat being used.

Meters must be installed where possible but only where it is cost-effective and technically feasible.

If a block of flats uses a single boiler for the block, each apartment would likely require a meter to be installed.

More detailed information about the Heat Network Regulations can be found on the GOV.UK website.