Utility Liability Explained
Who is liable for the utility bills coming to a property? For owner occupiers that question is easily answered, but there are situations which are not so clear-cut.
The occupier of a tenanted property is liable for the gas and electricity supply to that property. There is no longer any need for a contract to be signed, or even for a phone call to be made: a deemed contract arises with the supplier when the occupier starts to use the power in the premises. Of course, if the occupant moves out without ever giving their details to the supplier, their liability will be theoretical, as the company cannot enforce a utility bill against an unknown person.
Tenants should check the identity of the power companies supplying the property at the outset. They should read all meters, and inform both the landlord and the supplier of the reading. That should be done when they move in, and again when they move out.
From the landlord’s point of view, they should also read the meter just before the tenant moves in and just after they move out, to make sure that the tenant’s information is accurate. They should inform the tenant of the utility companies, including contact details and customer reference numbers, and what the current method of payment is.
The situation can be more complicated when it comes to sharing arrangements. If there is a main tenant who sublets to others from time to time, then it may be best for that person to take responsibility for the bill and for how it is shared between the occupiers, though legally everyone who is occupying the property is ‘jointly and severally’ liable.
The Utilities Act 2000 provides that if no contract exists for a company to supply gas or electricity to any premises, the supplier will be deemed to have contracted with the occupier or, if the premises are unoccupied, the owner. It goes on to provide that the deemed contract will incorporate the supplier’s usual terms and conditions. Ofgem, the regulator, has stated its view that the start date of the deemed contract is not the start of occupancy but the point when the supply is first used, so a new occupant will not be liable for standing charges pre-dating their use of the supply. That is Ofgem’s opinion: it has not been confirmed as yet by any court.
If there is a joint tenancy, again all tenants are jointly and severally liable, which means that each or any of them can be pursued for the whole bill, and it’s up to them to decide how it should be shared.
When tenants come and go without much formality, they should, to protect themselves, insist on absolute clarity about the bills and take meter readings when they move in and out of the property, to avoid later issues. For example, if the landlord tells the supply company years after you have left the property that you were responsible for the bills for a period when you were not there, you will at least be able to confront them with the facts of the matter, rather than relying on guesses and estimates.
The landlord can deduct any utility arrears from a tenant’s deposit, but only the amount that is fairly attributable to that tenant’s occupancy.
So again, the message is to read the meters when there is to be any change. If the head tenant arranges any sub-tenancies him or herself, then the landlord should make sure that the tenancy agreement reflects that they are responsible for the bills, so as to avoid later disputes.
Water bills can cause problems with tenancies. Everyone knows that they are liable for the gas and electricity that they use, but it’s easy to hide your head in the sand when it comes to water bills. Young people who are moving into their first flat may even be unaware that they are running up the debt.
For water, unlike gas and electricity, there isn’t normally a choice of suppliers: one company provides water for a district, so to that extent the position is simple. When you move into a property you become liable for the water bills, jointly and severally with any other occupants.
Since privatisation, water companies have not had the power to disconnect water supplies for non-payment; arrears are collected as a normal civil debt.
In a tenanted property, the landlord is responsible for informing the water company about the identity of the tenants, so that bills can be addressed to them.
Water is one service for which the supply isn’t usually metered in rented properties. So that is one utility bill for which tenants should be able to calculate their liability without too much difficulty.