Hopeful Landlord - What if tenants don't pay bills? who pays for that?

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    Hopeful Landlord - What if tenants don't pay bills? who pays for that?

    I haven't bought a house to rent yet but have been taking time on reading a lot before I commit to buying and renting one.

    One question is that: what happens if the tenant in on a 6 months contract and by the end of the contract, they haven't paid any bills like electricity, water or gas?

    Will I, as the landlord, be responsible to pay those bills? What will happen to them?

    Sorry if this is a simple question, but any answer would be brilliant please. Thanks.

    #2
    You ensure that the Tenancy Agreement clearly states that Ts are resp for all metered utility bills & ensure move in/move out inspection records the meter readings. Ts also have right to change supplier and poss install a prepayment meter without ref to LL.

    If you include utility bills, make sure rent is sufficient to cover unbridled use.
    If water is rated, not metered then rent + half year water charge pcm thus you can vary monthly water charge without a rent increase.

    Comment


      #3
      Originally posted by mariner View Post
      You ensure that the Tenancy Agreement clearly states that Ts are resp for all metered utility bills & ensure move in/move out inspection records the meter readings.
      You should also contact the utility providers yourself when the tenants move in to provide the meter readings and to put the accounts in the names of the new residents, which should fully cover you.

      Although the utility companies can't chase you for the unpaid bills of your tenants, it's still in your interests to ensure bills are paid though (so don't shirk from handing over any forwarding addresses): if you have a succession of non-payers living in your property it's likely that future incoming tenants will have difficulty obtaining a credit account and will be stuck with an expensive prepayment meter. That may impact on your ability to attract the sort of tenants you want.

      You haven't mentioned Council Tax - you should do the same as above in terms of notifying them; however this is slightly different in that apparently the authorities do have the legal power to chase up the landlord for unpaid CT if they can't track down an errant tenant. Never happened to me and I don't think it's commonly done.

      Comment


        #4
        Email, follow up with hard copy, electric,gas, Council & water with meter readings if relevant and new Tenant names at changeover so there's no doubt, copying tenants.

        Avoids them telling you 4 months later that account is still in your name, or meter readings lost, or new occupier not notified...
        I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

        Comment


          #5
          And do keep those records for at least 6 years. In the last year, an old portfolio that we sold has reappeared ( sadly due to a lack of thoroughness by a former staff member) where sundry debts are being allocated to the owner and payment chased. Council tax is a particular problem where they need proof that there was a contractual obligation that supersedes yours as owner.

          Artful's advice is spot on. Do follow it.
          Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

          Comment


            #6
            So long as you have a formal tenancy agreement to prove that the tenants were resident during a certain period, and you contact all the ulitities and remember to do the council tax too, when the tenant moves in and out again, you should never be liable for unpaid bills. We had a tenant who didn't pay a penny for his electricity during a whole 6 month tenancy. When he finally moved out, we started getting his "red" bills for several £100. We just contacted the power company and gave them our proof that we were not liable and never heard any more. The power companies generally have huge debt collection services, who can trace and pursue debtors themselves.

            The only problem you might have, is if the tenancy is a long one - a couple of year perhaps, and they arrears continue to the point where the power company installs a key meter and ramps up the tariff to recover the money owed. If this happens, you must contact the company the moment the tenants move out, so the power company can transfer the debt to them - otherwise, your incoming tenant will be faced with paying the previous tenant's arrears. Power company should attend and remove the key meter if you can prove the debtor has moved on.

            I would be more worried about what would happen if the tenant stopped paying rent, which is a far more lengthy process to recover and you would have to chase them yourself or through the courts to recover your money.

            Comment


              #7
              I don't think LL can open utility accounts for Ts as single bill holder required and a contract required. That is Ts resp.
              Certainly notify utilities that Messrs X,Y,Z are Ts of said property from <date>, with resp for utility bills and provide meter readings from move-in inventory.

              Comment


                #8
                Thank you all for the valuable information. Cleared up lots of confusions. Thanks.

                Comment


                  #9
                  Originally posted by mariner View Post
                  I don't think LL can open utility accounts for Ts as single bill holder required and a contract required. That is Ts resp.
                  I think it may vary by utility company. Certainly in the past I've been told variously when phoning in meter readings at change-over that they couldn't take the incoming tenant's details from me; however last week I did this with NPower, told them the new details, and when I asked "should the new tenants contact you personally too?", was advised "No".

                  Comment


                    #10
                    I believe landlords will soon face liability for a tenant's water bill. See http://blog.painsmith.co.uk/2011/03/...ter-usage-lie/

                    Comment


                      #11
                      Originally posted by westminster View Post
                      I believe landlords will soon face liability for a tenant's water bill. See http://blog.painsmith.co.uk/2011/03/...ter-usage-lie/
                      I'd heard that too: but the top-line story seems to be a bit scaremongery to me, since (as stated in the above link, in fact):

                      "Section 45 of the Act amends the Water Industry Act 1991 to place an obligation on the Landlord to provide the tenant’s contact details to the relevant water company. The rationale behind this is to prevent tenant’s departing properties without providing water companies with appropriate forwarding addresses and leaving unpaid bills. Should the landlord fail to comply with this provision he will become jointly and severally liable the invoices of the water usage at the rented property".

                      So if the LL is proactive and routinely provides the contact details of new tenants to the water co (as I always do myself), there shouldn't be a problem. Would be surprised if this doesn't get enacted with the other utility companies too, to be honest.

                      But I suppose the next step, in a few years time, will be to make LLs are still jointly and severally liable, regardless of whether they provide the tenants names...

                      Comment


                        #12
                        Originally posted by Ericthelobster View Post

                        But I suppose the next step, in a few years time, will be to make LLs are still jointly and severally liable, regardless of whether they provide the tenants names...
                        If that comes to pass I foresee a huge change in letting agreements where the landlord will have a right to order services cut off from properties where the bills are unpaid, there seems to be many dodges the utilities and government may try but if a landlord is on the bill then he has to have a right to lessen the impact of a bad payer.


                        Or......having thought about it, practically all rental properties on pay-as-you-go meters.
                        Last edited by jta; 29-10-2011, 15:37 PM. Reason: Or........
                        I offer no guarantee that anything I say is correct. wysiwyg

                        Comment


                          #13
                          Originally posted by jta View Post
                          If that comes to pass I foresee a huge change in letting agreements where the landlord will have a right to order services cut off from properties where the bills are unpaid, there seems to be many dodges the utilities and government may try but if a landlord is on the bill then he has to have a right to lessen the impact of a bad payer.


                          Or......having thought about it, practically all rental properties on pay-as-you-go meters.
                          That's nice,Back to the Bad old days then of Peter Rachman and Co!

                          and

                          Peonlizes the good tenants with higher fuel cost via pre-payment meters
                          Thunderbirds are go

                          Comment


                            #14
                            Serfs 'em right
                            I offer no guarantee that anything I say is correct. wysiwyg

                            Comment


                              #15
                              "Peonlizes the good tenants with higher fuel cost via pre-payment meters"

                              Last I heard Govt was going to make elec co's provide prepayment meters at their standard tariff. Any premium applied would only be to recoup unpaid bills attributable to that Tenant/occupier. Most resp Ts prefer key meters. I believe westminster posted recently that recent changes make the LL jointly liable for water usage if bill is in arrears. Bet gas & elec will soon pick that up. All the more reason for LL requiring proof that utilities are paid up to date at end of T and need for T forwarding address.

                              Comment

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