Carter Jonas
Carter Jonas

Heat is off – for now – for new landlord regs

Landlords need to be aware of the Heat Network (Metering and Billing) Regulations 2014. The new requirements apply, among other things, to "communal heating". Here that means providing heating, cooling or hot water to more than one occupier in a building. The obligations are placed on a "heat supplier" but are likely to catch landlords of residential and commercial multi-let buildings who pass on energy costs to their tenants, something that may become more common with the rising popularity of biomass installations.

One obligation is for heat suppliers to provide detailed information to the National Measurement Office about their communal heating systems. The notification deadline for existing systems was April 30, 2015. This was amended to December 31 due to lobbying before the General Election to give more time for heat suppliers to comply. There will still need to be a lot of work done before December to ensure that all heat suppliers provide the necessary information and landlords of multi-let buildings understand that these Regulations apply to them. The information must then be updated every four years.

In certain situations heat suppliers must also ensure that bills and billing information are accurate,

based on actual consumption and in line with other minimum requirements spelt out in the Regulations. Landlords may not therefore be able to recover 100 per cent of costs of supplying heating and / or hot water to their tenants if the lease documentation only allows them to recover costs on a percentage basis through a service charge. A tenant whose actual consumption of energy is less than provided for in the service charge could argue that by charging more the landlord is in breach of the Regulations. Conversely a tenant whose consumption is more is likely to argue that the reimbursement must be limited to the contractual obligation under the lease.

The billing requirement doesn't apply unless "it is technically possible and economically justified to do so" but that is taken to be the case automatically where the estimated reasonable costs of issuing the bills and information is £70 or less per customer per year.

There are other duties too, including various obligations in relation to installing meters, although these will only apply from the end of 2016.

Non-compliance with any of the main duties is an offence. However breaches before April 30, 2015, cannot be punished by criminal prosecution.

Ben Myerscough

Associate Partner

Based in Marlborough, Ben is a Rural Surveyor who specialises in Rural Estate Management.  He acts for a wide range of private and institutional clients throughout the South West of England, provi...

Read more

01672 519712