Most of us look forward to Spring but I think that it’s fair to say that this year we are looking forward to it more than ever because it will bring the hope of lower living costs and, for landlords who let “all-inclusive”, a welcome relief from the stress of trying to keep up with the frightening increases in utility bills.
Even those of us who do not pay the utility bills in our rented properties have to cover them when we have a void, and I recently had a shock from Severn Trent who provides the water in my area. I had listed on Landlord Tap that a property was empty and had been since July last year and that I would be responsible for the water bills until January when the contractors had finished working there. But it was now up for sale and the water has been turned off because no one will need it until it is sold. They wrote to inform me that they would be charging me the normal rate because there may be the need to “central heating, flushing a toilet or simply making a cup of tea” The property is empty apart from carpets, central heating doesn’t need to draw water and the water is in any case turned off….. Unfortunately, there isn’t a meter in this property, an oversight which won’t happen again, and therefore I have been charged £191.21 to the end of March!! This is of course in addition to council tax at full rate, £190 a month and standing charges for electricity, I am using gas for the heating to keep the property warm and dry and prevent frozen pipes, £421 last month, which truly is shocking when there is no rent coming in. First job on my list is to check that every one of my properties has a smart meter before they are between tenancies and I am paying for the privilege of having a water supply which is not being used.
While on the subject of water bills a reminder that the water providers are the only utility suppliers who cannot withdraw their services and therefore they alone have legislation which gives them the right to charge the landlord/owner of a property if they haven’t been informed who is the person responsible for a given period. It’s very easy for landlords to do this. Join Landlord TAP here LTAP – Home (landlordtap.com) and list all of your properties and the current liable person. Each time a tenancy changes update the record within 28 days. If we do this we can only be held responsible when there are no tenants which means, as long as there is a meter fitted, we will not be paying a generic bill. It was after I updated one of my properties that I was sent the bill mentioned above but I had told already them who the responsible person was and the tenant was billed during the tenancy.
There has been talk about the government targets for energy efficiency meaning that privately rented properties will need to reach an energy performance rating of C or above as soon as 2025 and the conversations for this continue but the reality is that, regardless of the legal requirements, we all need to do everything possible to reduce the cost of heating our rented properties whether we are paying the bills through all-inclusive rents or they are being paid by our tenants because the next hurdle we will all be facing is the increase of damp and black mould caused by the lack of heating and not only a further expense but the possibility of enforcement action from the local authorities.
There are two measurements needed to check that a room is not in danger of becoming damp and mouldy, the air temperature and the humidity level. It’s the combination of lack of heat and high levels of humidity which cause the problems. There is an age-old discussion of who is responsible for damp and mould and it’s often difficult to convince a tenant that the landlord cannot do anything because the problem is the result of lifestyle.
To begin with, we must make certain that there is no dampness coming in. This is the perfect time of year to check the guttering and rainwater goods, drains and brickwork. In February/March every year, I have my guttering cleared and the downpipes washed through, the drain covers cleaned and check for any green moss on walls or bricks which are wet. This doesn’t take long for a contractor who is used to doing this type of work and it’s an excellent way to prevent problems.
When we are sure that the damp is not coming in we begin the job of convincing the tenant that they are controlling it, or rather not controlling it. I consider myself very lucky that I have never had a complaint about dampness/mould but I have always worked to prevent it. I’m wondering whether the utility cost increases may force some of my tenants to reduce the amount of heat they use and if so will I be faced with dampness and mould? I have decided to take the bull by the horns and I have bought some of these:
These small thermometers can be put in any room to show the actual temperature and the level of humidity. If you are wondering, as I did, what is a healthy level of humidity here is the answer from Humidifiers: Ease skin, and breathing symptoms – Mayo Clinic
“Ideal humidity levels
Humidity is the amount of moisture in the air. Humidity varies depending on the season, the weather and your home’s location. Generally, humidity levels are higher in the summer and lower in the winter. Ideally, humidity in your home should be between 30% and 50%. Humidity that’s too low or too high can cause problems.
Low humidity can cause dry skin, irritate your nasal passages and throat, and make your eyes itchy.
High humidity can make your home feel stuffy and can cause condensation on walls, floors and other surfaces. Condensation can trigger the growth of harmful bacteria, dust mites and moulds. These allergens can cause respiratory problems and trigger allergy and asthma flare-ups.”
I have always noticed that my Nest App tells me the humidity level in my home but, until now, I didn’t really take note of it. I will be having this conversation with my tenants and leaving them with the thermometer if they want to keep an eye on the humidity levels, particularly where there is any sign of dampness or where anyone in the home has a health problem listed above I believe that it’s important to show my tenants that I care about them, not just my properties, and I have found that most people respond very well to information which is helpful not only to their comfort but to their health. During the winter tenants do tend to dry washing on radiators, actually so do I, this isn’t a cost thing for me it’s because I cannot stand looking at a full clothes horse every time I walk into my laundry room and I haven’t got a dryer. My point is that this is normal behaviour and landlords need to stop blaming this practice when there is mould. I have no mould in my home and in fact, the humidity level on my Nest is usually around 38% which I now understand is considered low and is probably the cause of my dry nose and throat. Every day is a school day.
I am going to look at all of my Energy Performance Certificates and carry out any works which I believe will make a difference, I’m also going to take a draft detector around and if I find drafts have them filled with expanding spray foam, check my double glazing to see whether any of the seals need to be replaced and anything else I can think of to reduce utility bills for my tenants. Whether you are paying the bills or they are it makes sense to do everything possible to take pressure off this expense before next winter.
Turning to my colleagues who do let “all-inclusive” there have been some very angry exchanges in Facebook groups because landlords are struggling with increases in their mortgage payments, which they cannot control, and want to control the amount of their increasing utility bills. This is totally understandable, but the law IS the law, and they can only do that which the law allows. Many tenants are now turning to Citizens Advice, Shelter and local authorities to report the fact that they are paying for heating in their rent, but the landlord is withholding heat or trying to charge an extra fee or increasing the rent. Some of this can be done and some cannot:
The Legislation Around Rent Increases
- Should only be made once a year
- Should be covered in the tenancy agreement
- Should not be made during a fixed-term contract
- Do not need to be on a new contract if the tenancy has become a rolling periodic
- When the proposed new rent can start?
- The date in paragraph 4 of the notice must comply with the three requirements of section 13(2) of the Housing Act 1988, as amended by the Regulatory Reform (Assured Periodic Tenancies) (Rent Increases) Order 2003:
“A minimum period of notice must be given before the proposed new rent can take effect. That period is:
– one month for a tenancy which is monthly or for a lesser period, for instance weekly or fortnightly;
– six months for a yearly tenancy;
– in all other cases, a period equal to the length of the period of the tenancy – for example, three months in the case of a quarterly tenancy.
starting date for the proposed new rent must not be earlier than 52 weeks after the date on which the rent was last increased using this statutory notice procedure or, if the tenancy is new, the date on which it started”
- If the basis for a rent increase is not included in the original contract you must inform the tenant in writing using the Section 13 Notice on Form 4 here
Form_4_-_Eng.docx (live.com) England
Scotland has just lifted the embargo on rent increases but they haven’t yet published the new forms. There is now a cap of 3% per annum.
- The tenant will read on the Notice their legal right to ask a rent tribunal to assess whether the rent increase is fair. The tribunal will base this decision on the average local rents for a similar property in the area. They may agree, increase or decrease the proposed increase and we are legally bound by that decision.
Add a Fair Usage Clause Where Utilities are Included in Rent
I have been telling landlords for many years that they need a Fair Usage clause in their all-inclusive rental agreements. Many landlords have preferred to install equipment to control the heating in those properties
There are several pieces of legislation which govern the supply and charging of heating
“A cold home is one that cannot be maintained at a temperature between 18°C to 21°C at a reasonable cost to the occupier. Living in cold conditions can cause serious health problems.
Supply adequate heating in proper working order
Ensure the property is insulated, meeting a minimum EPC E rating
Repair broken windows and doors”
“Heating should be controllable by the occupants”
Appling extra charges:
“From 1 January 2003, the maximum price at which gas or electricity may be resold is the same price as that paid by the person who is reselling it (“the reseller”), including any standing charges.
Where the reseller has estimated the cost of electricity or gas sold to the customer, he will need to revise his calculations when he subsequently receives information about the actual cost, e.g. if he receives a reconciliation account from his own supplier. If in a particular year, it transpires that any individual customer has been overcharged by more than £5, the reseller must use reasonable endeavours to refund the whole amount of that overcharge.”
False Or Misleading Advertisements Under Consumer Protection Act 2019
“Section 2(28), of the Consumer Protection Act, 2019, defines misleading advertisements concerning any product or service. Misleading advertisement means an advertisement which falsely describes any such product or service”
When advertising a property/room to rent stating “all-inclusive” would come under the definition of misleading and that is unlawful. A better and more accurate term would be “inclusive of some bills” or “inclusive within limits” otherwise a Fair Usage clause would be very difficult, if not impossible, to enforce.
The clause must also be balanced and therefore there must be a provision for refunding any money overpaid, this is also covered by the regulation on re-selling.
The point which must be understood is that a Fair Usage Clause is not a clause to cover a landlord against increased costs. We need to revise our rents to do that and there will no doubt be increases across the board, as I am sure there will be in hotels, restaurants and many other services that have been hit badly by the increases in their overheads. The point of this clause is to ensure that tenants are not misusing the gas and electricity which is supplied, either by turning up the heating and going out or opening windows, inviting their friends to come around to cook in the shared kitchen, using the laundry facilities ….Unfortunately, I have heard stories which cover all the above and more and not to mention charging electric cars, use of sun lamps and extra heaters. It is fair and reasonable for the landlord to cap the volume of gas and electricity that they use but it is not fair to cap the cost to protect the landlord from rises – that is what the rent is for.
When signing up new tenants the Fair Usage clause should be pointed out and explained because it’s important that all tenants understand that over-usage by one tenant in an HMO may mean an increase in cost to all the other sharers, when this is explained it should have the effect of empowering every tenant to tell their housemates that they are not prepared to pay for something that person is doing which is over and above normal usage and this will make the life of the landlord or agent much easier and have the desired effect of reducing the usage.
What none of us want is to be left with empty rooms because tenants are angry that they are being expected to pay more than they thought, after all those tenants who choose “all-inclusive” do so because they want to know that they have one bill to pay every month, the rent, and no other liabilities.