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Water charging review leaves landlords more hot than cold

Landlord body, the British Property Federation (BPF), expressed satisfaction with the results of a major review of water charging this week. Earlier this year it was proposed that landlords could face being automatically liable for the unpaid water bills of their tenants. However, following intervention by the BPF and other landlord organisations, the NLA and RLA, this threat has been avoided.

Instead, the Review concludes that there should be an obligation on landlords to notify water companies of changes in tenancy, and only then if failing to do so, would any liability flow. The water companies in turn should be obliged to make the notification process as easy as possible.

The Review also looked at charges in shared accommodation, often termed houses in multiple occupation (HMOs). It concluded that in such properties it was often practical for the property owner to be billed for water charges. In such situations the owners would often recharge to occupiers making water metering difficult.

In a compromise the Review concluded that owners of such property should be provided with the certainty of an assessed charge providing they were conscious of water conservation as evidenced by meeting Sustainable Homes Code level 3.

Implementation of such policies relies on finding the necessary legislative time.

Reacting to the Review results, Ian Fletcher, Director of Policy (Real Estate) at the BPF, said:

“Our actions have averted the immediate threat of legislation that could have seen landlords automatically liable for their tenants’ water bills. Following lengthy discussions with the water companies and Review team we believe a satisfactory outcome has been achieved.

The water companies have significant problems with bad debts. However, to make landlords instantly liable for their tenants’ water usage and debts would have been inequitable and run against the environmental objectives of wider water metering. We are pleased therefore to have thrashed out a compromise that sees landlords and water companies working together for the benefit of the wider public.

However, some devil remains in the detail, particularly on what is defined as an HMO.”

For more information and all PR and media queries, please contact Andrew Teacher, Head of Media, on 020 7802 0113 or 07968 12 45 45 or ateacher@bpf.org.uk, or James Anderson on 020 7802 0104.

Notes to editors

1. More details on the Water Charging Review can be found at: http://www.defra.gov.uk/environment/quality/water/industry/walkerreview/final-report.htm. The relevant paragraphs are: 12.9.3 and 12.9.4, with the detail in Annex 9. Paragraphs 12.9.3 and 12.9.4 state that:

“12.9.3 Provision of information to the water company by the landlord would discharge their liability for the water bill. We would suggest that the responsibility of the landlord to provide this
information should be on the first change of tenancy after the legislative change has been made, to stagger the flow of information to water companies. This legal change would provide a clear incentive for the landlord to identify the tenant to the water company on occupation of their property and there would be a clear incentive for the tenant to tell the water company when they are leaving the property. The review team suggests that if a landlord does not provide information on their tenant to the water company within 21 days of occupation they should then become liable for the water bill.

12.9.4 In certain accommodation, for instance some houses in multiple occupation (HMOs), the short-term nature of tenancies means that the landlord should be able to assume liability for the water bill and charge tenants accordingly. However, given the move to metering and because it is more difficult for the landlord to incorporate water charges in rent for measured properties, the review team suggests that where the property is supplied through a single meter, the landlord should be allowed to ask for an assessed charge for the property, as long as it meets the water efficiency requirements of level 3 of the Code for Sustainable Homes.

This would ensure that everything is being done to improve water efficiency within the property, but allows for the practicality of a known annual charge, which can then be incorporated into rents.”

2.The policies detailed would require changes to the Water Industry Act 1991.