Should landlords expect tenants to cover utility costs during their lease? – TNT

Aside from the obvious differences between HMO and standard property tenancies, there are several potential pitfalls that can catch a landlord or agent off guard. Some of these issues only become apparent at the end of the tenancy when a deposit claim is rejected – claims that might have been successful had the same dispute occurred within the context of a standard tenancy agreement.

The dispute

This month’s case study covers one such scenario. A tenant rented a room in an HMO property under the agreement that utilities would be included within the monthly rental amount. However, the tenancy agreement also contained a reasonable use policy, stipulating that the tenant would be responsible for any combined utility costs exceeding £30.00 per month.

The evidence

At the end of the tenancy the landlord presented a claim whereby the reasonable usage had been exceeded during the tenancy. Supporting statements had been provided from both the gas and electricity providers showing the monthly bills which had been paid by the landlord. As there was only one metered gas and electricity supply, the landlord stated that the accumulated overspend of £630.00 was being evenly split between the four occupiers of the property at the time and that they were jointly and severally liable for these costs.

At this stage, it is important to highlight a critical distinction. The claim related solely to the tenancy of a single room, and all tenancy documentation—including the tenancy agreement and the check-in and check-out reports—were in the name of this individual tenant alone. As a result, it was not possible to hold this tenant liable for obligations set out in the separate tenancy agreements of the other occupants. Furthermore, the other tenants in the property may have had tenancy agreements with different start and end dates, different durations, or even varying reasonable usage caps stipulated in their respective contracts. Each individual tenant’s usage of utilities may significantly differ, for example, the amount of time spent working at home, car charging etc.

The outcome

While it was evident that the landlord had indeed covered the utility costs throughout the duration of the tenancy in question, it was not possible for the adjudicator to determine the specific tenant’s responsibility, if at all, for the overspend. Since the claim relied on an unenforceable assumption of joint liability, the adjudicator was unable to make an award, and the deposit was returned to the tenant.

So, what are the key points here?

+ Whilst it may not have been feasible in this scenario, having a joint tenancy with all the tenants named under the same agreement would have bound them to the same set of obligations. They therefore would have been jointly and severally liable for any outstanding costs as long as this wasstipulated within this agreement; a deduction for the overspend would have then been valid.

+ Whilst separate tenancies within the context of an HMO offer a degree of flexibility, the paying of utilities can become a problem in a property that only has one metered supply.

+ By following these tips and using a trusted deposit protection scheme like the Tenancy Deposit Scheme, landlords and letting agents can ensure disputes are resolved efficiently and fairly.

If you are interested in further guidance relating to deposit disputes, visit the Help Centre at TDS to browse further guides.

Sandy Bastin is director of resolution at TDS Adjudication Services – the only not-for-profit tenancy deposit protection scheme.