Does the deposit cover unpaid utility bills if my tenant does not pay them?
The Tenancy Deposit Scheme was asked "Does the deposit cover unpaid utility bills if my tenant does not pay them?" by a landlord. Here’s their response to the query.
In most cases, the landlord needs to prove that they have incurred a financial loss in order to make a claim from the tenancy deposit. If the tenant fails to pay for utilities, it does not necessarily mean that the landlord has suffered a monetary loss. If the utility accounts and any arrears are documented properly, they would remain the tenant's responsibility rather than the landlords.
If the landlord and tenant agree that the tenant is responsible for the utilities, they should ensure that the tenancy agreement clearly outlines what these responsibilities are.
The tenancy agreement should reflect the obligation for the tenant to transfer the utility accounts into their name, and clearly explain the tenant’s responsibility to pay the utility bills. If, at the end of the tenancy, the tenant fails to pay the utility bills, it will remain the tenant’s responsibility to settle these debts.
In some cases, the tenant may vacate the property early and notify the utility provider of the date they vacated and not the date the tenancy ended. In this instance, it is common for the utility provider to request a copy of the tenancy agreement to verify the end date of the tenancy and therefore confirm the tenant’s responsibility.
TDS Tip: Notify utility providers at the tenancy’s end with a final meter reading and the tenant’s forwarding address.
There are some instances where additional consideration may be required. For example, when outlining the tenant’s responsibility in relation to council tax, it is worth checking if there are any additional requirements presented by the local authority in relation to payment of council tax or payment during void periods. Each local authority has different regulations regarding this. You may need to adapt the utility responsibility clauses in your tenancy agreement in line with these regulations to ensure that there is no confusion.
TDS Tip: During void periods, ensure utility bills are in your name, and explore reduced council tax options for vacant, unfurnished properties.
When it comes to water services, it's important to consider additional factors. Depending on the region, the responsibility for notifying the transfer of name may fall on the landlord rather than the tenant. Landlords should make sure their tenancy agreement reflects these requirements and are aware of their responsibilities.
Service and block management charges are another common cause of uncertainty. Your tenancy agreement is a key document to outline responsibility in this area. However, it is also worth ensuring that you are fully aware of what these charges cover and who the responsible party ultimately is for their payment.
In new build developments, you may also need to ensure that the meters/charges are being correctly directed to the right premises.
You may want to consider seeking legal advice to ensure your tenancy agreement is suitable in instances such as this.
This article was originally published on www.tenancydepositscheme.com.