Landlords and bill-splitting: responsibilities, deposits and options

Tenants failing to stay on top of bills can cause issues for you as a landlord. In this guide we explain which bills you’re responsible for, how to tackle bill splitting and when to use deposits. In this guide:
  • Landlords’ responsibilities for bills
  • Bills-inclusive and non-inclusive tenancies and bill-splitting
  • Security deposits – when are landlords allowed to deduct?

Landlords’ responsibilities for bills

Your responsibilities can vary depending on the situation with your tenants. When you create a tenancy agreement, you need to make sure you’re doing everything to protect yourself and your property.

What bills are landlords liable for?

Your liability as landlord depends on whether you or your tenants have registered with the utility companies.

If you’re registered with the utility companies

Some landlords register with the utility companies but combine rent and utilities in a single bill and have the tenants pay them directly. If you do this, understand that:
  • you must indicate this clearly in the tenancy agreement
  • the tenant is not liable to pay bills directly to the utility companies
  • you’re responsible for any debt the tenants accrue
  • you can make a claim against the deposit in order to cover your costs

If the tenant is registered with the utility companies

  • The tenant is liable to pay the bills from the date they moved in.
  • The tenant will need to contact the supplier and state their moving-in date and provide meter readings from that day.
  • The current tenant is not responsible for the previous tenant’s debt.

Are landlords liable for tenants’ unpaid bills?

If your tenants are registered with the utility companies, you, as landlord, aren’t responsible for paying any unpaid utility bills or council tax as long as you follow these key steps.
  1. Ensure that the tenancy agreement includes a clause which clearly states that the tenant is responsible for all utility bills and council tax. Keep a signed copy of this in case of a dispute.
  2. Inform the council tax department whenever there is a change of tenancy—including the name of your new tenant.
  3. Inform water, gas, electricity and any other relevant utility companies when there is a change in tenancy. Ensure you provide a meter reading for the end of the previous tenancy so the company can charge accurately.

What do I do if there is a bailiff at my tenants’ property?

If a previous tenant owes money, you may find they receive letters, and potentially have bailiffs arriving, at their house. Do not let the bailiffs in. Instead, ask which business they are working for and contact them directly. You may need to provide documentation to prove that you’re the landlord and the tenant has moved out. If you have any information on where your previous tenant has moved to, let the company know so the problem can be resolved swiftly.

What happens with council tax?

Students are exempt from paying council tax, but they’ll need to get an exemption certificate from the council, which often involves providing proof of their student status from their university. Bear in mind that if, at a later date, you’re unable to prove that your property was occupied solely by students, you may be liable to pay the outstanding council tax.

Bills-inclusive and non-inclusive tenancies and bill-splitting services

Bills-inclusive and non-inclusive

  • Bills-inclusive: bills are included in rent price
  • Non-inclusive: bills are not included in rent price
It is up to you to choose which bills you include in the rent agreement. An all-inclusive rent agreement can include:
  • rent
  • gas
  • electricity
  • water
  • broadband
  • TV licence
Obviously, managing this can be a lot of work, and you will need to stay on top of payments and price changes. You will be solely responsible for payment of the bills and you will need to clearly state this in the tenancy agreement. You will also be responsible for any debt your tenant accrues—although you will be able to make a claim against the tenant’s deposit for any debt they haven’t paid.

Bill-splitting services

If managing all the bills yourself sounds like a struggle, bill-splitting services like Split The Bills can help. They take responsibility for managing the bills. They have pre-agreed deals with service providers for all the major bills so you don’t have to look for the best deals yourself. Services like Split The Bills will manage your entire portfolio of bills-inclusive properties, taking care of setting up services in the property and providing you with a consolidated bill each month. If you’d prefer to offer bills-inclusive to your tenants without the commitment, many bill splitting services like Split The Bills will also give you the option to refer your tenants directly to them and you can earn commission for doing so. Bill-splitting services makes it easier for both landlords and tenants: For landlords:
  • No chasing payments
  • No demanding utility letters
  • Peace of mind
For tenants:
  • Simple payment process
  • Shared responsibility
  • One simple bill

Security deposits—when are landlords allowed to take money from them?

Security deposits are designed to protect landlords by providing a financial safety net in case tenants damage the property or have financial issues with a utilities company. Usually, you would take a security deposit from the tenant before they move in. It’s typically the equivalent of 4–6 weeks’ rent. You’re allowed to make deductions from security deposits for the following reasons:
  • Unpaid bills at the end of tenancy
  • Unpaid rent at the end of tenancy
  • Stolen or missing belongings
  • Lack of maintenance
  • Damage to property
  • Lack of hygiene
However, you cannot make a deduction without giving a clear written reason for doing so. This is called legitimising a deduction. You can legitimise a deduction when:
  • the tenant agrees
  • a dispute has been resolved
  • a court order has been assigned
It is worth contacting a lawyer to ensure you stay on the right side of the law when dealing with security deposits.

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