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The landlord’s responsibilities towards utility bills explained
The landlord’s responsibilities towards utility bills explained
Landlords have many responsibilities when it comes to letting properties, so it is no surprise that there are many common queries shared by both first-time landlords and experienced landlords. Utility bills are a common area of confusion, although in most cases if a tenant’s name is on the bill, landlords are not liable for unpaid utility bills on their rental property.
However, there are some situations where this is not the case, so it is important that all landlords ensure they are fully protected and aware of their responsibilities. To ensure you are not caught out, we have compiled this useful guide to landlords’ responsibilities when it comes to utilities. We will also cover various scenarios such as what to do when a tenant doesn’t pay their bills, responsibilities in between tenancies and how bill splitting services can simplify tenancies with all-inclusive agreements.
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Find out when a landlord may be responsible for utility bills.
Read our tips on ensuring you avoid being responsible for unpaid utility bills.
Find out whether your tenants can change utility supplier and their responsibilities in doing this.
Find out who is responsible for paying bills in a house of multiple occupation.
Find out who is responsible for bills during void periods.
Your responsibilities when a tenancy agreement comes to end.
We answer common queries on paying utility bills.
In what situations could I be responsible for paying utility bills?
If the assured shorthold tenancy agreement states that the tenants are responsible for payment of utilities and the bills are addressed to the tenant, landlords will not usually be responsible for payment. However, if the utility provider accounts are held in the landlord’s name, as the previous tenant failed to register their details during the tenancy, the landlord may be responsible for payment.
How to avoid being responsible for unpaid bills
As a landlord, it is important to protect yourself from potential financial losses, so you should always state which utility bills are the responsibility of the tenant. For example, you may wish to clearly explain that the water bill, electricity, gas, council tax, TV licence, broadband and phone costs are not the landlord’s responsibility. You should also notify the local council when a new tenant moves in and provide tenant names and contact details.
You will also need to inform the various energy suppliers that there is a change of tenancy so that they can contact the new residents to set up the various accounts. The energy bill suppliers will need meter readings from the tenancy start and end dates, so you should ensure that these readings are always accurately recorded. If a tenant leaves the rented property and there are debts on their utility company accounts, accurate meter readings will ensure you are only liable from the date the property became vacant.
Finally, you should encourage your new tenants to set up their utility accounts as soon as possible, as this will reduce the likelihood of inaccurate or unpaid utility bills. Once the various utility accounts are open in your tenant’s name, you will no longer be responsible for payment.
Many tenants are attracted to an all-inclusive agreement, which means the cost of utility bills is included in the rent price. You can read more about the benefits of an all-inclusive bills agreement here.
Can a tenant change utility supplier?
Yes, if a tenant is responsible for payment of utility bills, they are allowed to choose who supplies their service. This means they are free to choose a better deal; however, they can only install a prepaid meter if they have written permission from the landlord. If you agree to allow a prepaid meter to be installed, you can ask that the tenant has the original meter installed when they vacate the property. If this is not completed, the cost can be deducted from the tenancy deposit if the tenancy agreement states this. Tenants should also inform you and their current energy supplier if they are changing suppliers.
Who is responsible for utility bills in a Multiple Occupation Property?
If you are a landlord of a multiple occupation property, otherwise known as a HMO or house share, there could be issues surrounding who is responsible for the various utility bills. Ultimately, whoever is listed as the account holder with the utility provider will be legally responsible for paying the bill. This means all occupants of a property would need their names to be registered with the utility company to share equal responsibility for payment.
Bills between tenants
If a tenant vacates the property, the landlord becomes responsible for all utility bills until a new tenant begins their lease. These gaps between tenants are often called void periods, and it is best to keep energy use and utility outgoings to a minimum during these gaps. However, you will need to keep heating set to a timer to prevent mould and potential maintenance costs.
Utility providers will ask for a meter reading from the day the previous tenant vacated the property and also from the day a new tenant takes over, so your bills will be calculated based on the property’s consumption between these dates.
End of tenancy utility bills
When a tenancy agreement comes to an end, it will be the tenant’s responsibility to close accounts with utility suppliers, as long as the bill is in their name. This usually takes a few days for the utility companies to organise, and a final bill will be issued to the tenant. To ensure this is completed, you may wish to provide your tenant with some guidance as part of the check-out process.
Common queries
Are landlords required to pay for water?
No, the Water Industry Act 1991 states that water companies have the power to charge the occupier of a property. If you can prove that a tenant occupied the property, you will not have to pay their unpaid bills.
Do landlords handle council tax?
Councils are usually very quick to follow up unpaid council tax bills; however, non-resident landlords are not usually responsible for payment. If tenants are jointly named as the occupiers on a joint tenancy agreement, they are all equally responsible for payment.
However, if the property is occupied by multiple residents with separate tenancy agreements, the landlord may be responsible for paying council tax. In addition, if the property is empty, the landlord is responsible for paying the council tax bill, although some councils offer a discount.
You should be aware that full-time students are exempt from paying council tax. You can read more about students and council tax here.
What are the rules with students and utility bills?
Students are responsible for paying all utility bills; however, they are exempt from paying council tax if their course lasts more than a year, and involves more than 21 hours of study per week. If the bills agreement is not inclusive, students will need to register for all other utilities, and as long as their name/names are listed on the account, they will be responsible for payment. However, it is more common for utility bill costs to be included in the rent in student houses.
You can read more about renting to students here.
How can I prove my tenants live in my property?
How can I prove my tenants live in my property? The tenancy agreement, which is signed by tenants, will act as proof that a rental agreement is in place. In addition, it may also be possible to visit the property to complete a routine inspection and obtain proof of occupancy, although you will need to provide the tenants with notice and obtain permission to enter the property.
How often should I check the meter readings in my property?
Landlords should take meter readings at the start and end of every tenancy, with readings completed at a minimum of every three months during any void periods. Ideally, monthly readings will be completed by the tenants.
What if my tenants have a disagreement about splitting bills?
Usually, occupants of shared accommodation agree to split utility bills equally; however, if a dispute arises, this can become complicated. If a tenant is listed as the account holder for a utility bill, they are legally responsible, so the other tenants are under no legal obligation to pay. One of the best ways to avoid these potential issues is to offer prospective tenants an all-inclusive rent, which includes the rent and the total cost of the split utility bills.
What if a tenant moves out without letting me know?
As soon as you realise a tenant has moved out, you should contact the various utility providers. If you can provide proof that the tenant was the legal occupier of the property until the date you gained access, they will be liable for the bills if the accounts were in their name.
Are students exempt from utility bills?
Students are exempt from paying council tax if their course lasts longer than a year and they have at least 21 hours per week of study time. However, they are still liable for all other utility bills.
What if I lose the tenancy agreement?
If you have lost the tenancy agreement, you may still have proof of the tenancy beginning and ending if you used the services of a letting agent or managing agent. If you no longer have access to your own tenancy agreement, the tenant may be willing to provide you with theirs. However, if there are disagreements, you may need to obtain legal advice.
Making utility bill payments easier for tenants
As a landlord, if you are concerned about potential issues with unpaid utility bills, especially in student properties and HMOs, you may choose to offer an inclusive rental agreement. Tenancies which charge a fixed price for rent and utilities are increasing in popularity, with many tenants finding budgeting is easier and landlords benefiting from more reliable payments.
You can read more guidance on choosing a bills agreement here.
Obviously, an all-inclusive agreement will mean that as a landlord, you will be responsible for arranging and paying utility bills, which can become time-consuming. However, here at Split The Bills, we offer a utility bill management service which is designed to save you time, reduce the risk of mistakes and ensure everything is calculated and paid promptly. To find out more, please contact our team today.
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