Landlords, Heat and Regulations

Proposed consumer protection regulations for the supply of heat will impact all new and existing heat suppliers, but landlords of residential properties will face some unique challenges that need to be considered early.  Current proposals include:

• “Unbundling” heat charges from rent or service charges;
• Limiting back-billing for heat consumption to 12 months;
• Banning heat suppliers from evicting customers due to non-payment of heat charges, even where they have the power to do so under existing powers as a landlord;
• Requiring all heat suppliers supplying domestic properties do so under a heat supply contract;
• Requiring heat suppliers to take a pro-active approach to identifying vulnerable customers;
• Banning disconnection of heat supply to vulnerable customers in debt;
• Allowing heat charges to include profit where tariffs are not ‘disproportionate’.

The impact of these proposals will impact different landlord operated networks in different ways, but there are clearly significant areas where these proposals do not align with the current obligations on landlords under the Landlord and Tenant Act 1985.  Updating leases and tenancy agreements, changing accounting procedures and imposing new processes for both accounting and customer care are all likely to be required when rules are imposed from January next year.  Between now and then landlords and management companies should get prepared by ensuring they fully understand the current structures they have in place for the supply of heat to their residents.