Landlords could be Liable for Tenants Water Charges

Landlords could be billed for their tenant’s water rates arrears if they fail to advise the utility company of the tenant’s details. This is the outcome of recent changes to the law.

Up until recently, a tenant’s arrears of any of the utilities: water, electricity, gas or telephone had not been a concern of the landlord. The contract for the supplies is directly between the legal occupier and the supplier, and the letting agreement should state clearly that the tenant is responsible, so the landlord is invariably in the clear.

This has always been the case until now, except for houses in multiple occupation (HMOs), where the landlord is always responsible for utilities supplies to the property and is expected to recover from the individual tenants.

Following the introduction of the Water Industry Act 1999, water utilities companies, unlike all the other utilities, had their traditional threat of cutting off supplies to non-payers withdrawn – they are no longer allowed to use this sanction by law, and effectively have their hands tied on the issue.

This has lead to increasing concerns from the water utilities companies faced with ever increasing debts from tenants, especially when landlords fail or refuse to notify them of tenants’ details.

Following Ofwat and government reviews on how water charges are to be collected, and specifically over this landlord issue, the recommendations have now lead to changes in the law under Part 2, s45 (1-3) of the Flood and Water Management Act 2010, which came into force in October 2012.

Effectively, what this means is that landlords failing to notify the suppliers (water companies) of a tenant’s details will become jointly and severably liable with their tenants for overdue water charges. Invariably, the easier option for the water companies, therefore, will be to pursue the landlord for the debt, rather than trying to trace and recover from the tenant.

Landlords should always make a point of informing, in writing (and in view of this measure perhaps by recorded delivery for water utilities) all the utilities suppliers of the tenants’ full details when a new tenancy starts. Likewise, when a tenancy ends, the landlord should again inform the utilities companies, providing a forwarding address for the tenants whenever possible.

When agents are employed they should inform the utilities companies on behalf of their landlords, so landlords should confirm this is being done. Bear in mind that this may not be the case with a let-only contracted agent.

Article courtesy of Landlordzone

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