The heating went on this week. It might still be sunny, but don’t let that fool you – there is definitely a distinctly cooler feel to the air!
However, with radiators creaking into life, thoughts turn towards bills, which inevitably creep higher and higher. At this time of year more than ever making sure you get the best deal on your utilities is vital, especially if you’re footing the bill!
Installing meters can often offer a simple solution to this problem, providing a clear view of exactly how much has been used over a set time frame – nothing new you might think – meters have been around for year. However, are you aware of just how much has changed…?
Are you compliant?
For many HMO landlords, including bills in the rent allows them to keep a good handle on the management of the property’s finances, and means that they are not left with hefty unpaid bills at the end of a tenancy. It’s also very popular with tenants, especially students, who often find managing one outgoing bill easier to handle than juggling lots of household expenses.
However, under the Heat Network (Metering and Billing) Regulations 2014, any landlord who charges tenants for heating, cooling or hot water (whether billed separately or included in the rent) is classed as a heating supplier, and has further regulations to abide by.
‘Heating suppliers’ were required to notify the National Measurement and Regulation Office (NMRO) of information about properties where resident are supplied with heating, cooling or hot water, and potentially install meters at occupier level – the regulations required notification by the end of November 2015, however reports show that many landlords and property management organisations have failed to comply. This legislation is complex but cannot be ignored!
Despite the complexity of the requirements, non-compliance is a criminal offence that can lead to civil and criminal sanctions, including unlimited fines.
You could face substantial fines if:
- You haven’t already completed the notification
- You are involved in a new development or a major refurbishment and haven’t installed meters at occupier level
- You haven’t installed meters at building level on all existing properties that you manage or own
Full details of the requirements are available here: https://www.gov.uk/guidance/heat-networks
With technology taking every area of our lives, it is no surprise that our energy meters have had a technical revamp too! You may have seen advert for smart meters on tv but have you given a second thought for how they could work for your tenants? The government requires all homes and businesses to be offered a smart meter by 2020 (you’re not under any obligation to accept), so if you haven’t been offered one yet, chances are you will be at some stage soon…
What is a smart meter?
A smart meter measures the gas and electricity usage in a property, and converts the usage into monetary sped – displaying exactly how much money has been spent that day on a digital screen. The reading is sent securely to the energy supplier, resulting in accurate bills with no need for meter readings.
How does this benefit me, and my tenants?
A smart meter allows your tenants to monitor their energy use – the real-time financial tracker means that there should be no nasty surprises at the end of the month! Being able to see exactly how much their appliances cost them may make them more aware of how to best use their package too – if they regularly use their washing machine during the day, but have a package that makes it cheaper to run at night, they will actually see a difference on a screen in front of them!
As a landlord, having the bills managed in real-time allows you to relax, safe in the knowledge that the energy company has the most up to date data from your tenants. As long as you keep energy companies informed when your tenants move out, they will be able to calculate the exact usage with no more estimated bill or meter readings.
Sounds handy! Who decides to get one?
Depends who pays the bills!
Whoever’s name the gas and electricity bills are in can contact their supplier to have a smart meter fitted. Of course, if you are intending on having one fitted in your property, you will have to arrange suitable access times with your tenant.
If your tenant would like a smart meter fitted they are within their rights to do so, however it would be good practice for them to contact you and just let you know that this is taking place in your property!
According to figures from Landlord TAP, the domestic debt owning within the water industry is within the region of £1.4 billion in 2010/11, 80% of which is within the rental market. It is believed that the majority of this debt is caused because water companies do not have the correct information about the occupier. These unpaid debts add around £16 to every customers’ annual charges – around 4% of the annual bill.
Unfortunately, if the tenant responsible for the outstanding bill cannot be traced, it is down to the landlord, you, to foot the bill. The water industry have worked with the government and rental sector to rework this inbalance, and deigned the Landlord Portal, technology deigned to make reporting when a tenant moves in and out of your property simpler.
As well as ensuring that the details of who is living in your property, and therefore who is responsible for the bill, are kept up to date, a water meter can help make sure that the billing is kept under control. Water meter have long been a contentious issue, however there are now many parts of the country where it is compulsory to have a meter fitted in order to monitor water usage, so you may find that you no longer have much choice!
How does this benefit me, and my tenants?
There is a simple check to see if your tenants will be better off with a water meter or nor. The Consumer Council for Water have devised a clever calculator which shows an estimated bill for your property if your property were to be metered, taking into account the amount of people in the property and usage. If you are considering a change, it is worth having a look to see if a meter could provide a saving on your property. You can check it out here: https://www.ccwater.org.uk/watermetercalculator/
It is worth remembering that once a water meter has been in place for 12 months, it cannot be removed. So, whilst it may offer cost benefits to one type of tenant, you may find that once that tenancy comes to an end and you are looking to re-let your property, other people with different types of water usage may not be so keen to be billed in this way.
Who decides to get one?
In some instances nobody decides to get one, the decision will be made for you. Certain parts of the UK – London, the South East and Eastern England especially - have been classified as ‘water stressed areas’, and the Government has decided upon compulsory metering as part of a plan to maintain secure water supplies. As soon as a property – rented or owned – changes hand, so once a tenant moves out and a new tenant moves in, it is the water company’s responsibility to install a water meter in that property. This is of course no small undertaking, so there is a backlog to the task!
There are exceptions the rule though, even in water stressed areas not every property will be suitable for a water meter. These include:
- If there is more than one supply of water to the property
- If your property is on a shared supply
- If the pipework inside your property is inaccessible, obstructed or in poor condition
- If the company is not able to find a suitable place to fit the meter internally or externally
- If your property is a flat and have access to communal facilities or a shared hot water supply.
If you are not in a water stressed area, there is no legal requirement to have a meter fitted, however you may choose to do so. However, remember that the decision is with the person who holds the contract with the water company, so if you do not pay the water bill, you are not the person able to make that decision. If you think it would be beneficial, discuss the pros and cons with your tenant, or wait until the end of the tenancy. If you do pay the bills for the property (bills included agreement) you are able to make the decision, but remember to follow the rules with regards to access etc. A friendly conversation with your tenant about the benefits it could bring them is likely to be beneficial too.
As the account holder, your tenant can apply to have a meter fitted. However, they are only able to do so without your permission if they have a fixed term tenancy agreement of more than six months. If the agreement is less than this, they must have your agreement to make the changes to your property. The Water Industry Act 1999 states that a tenancy agreement cannot stop a tenant from having a water meter installed, as long as they pay their own water bills on the property.
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