LandlordZONE probes: How the Energy Prices Bill will impact landlords

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The recently-introduced Energy Prices Bill promises to give tenants whose (usually HMO) landlords include bills in the rent a legal power to chase them for the Government’s energy bills support cash.

The Bill, introduced in Parliament on 12th October 2022, provides the legislative footing needed to ensure that people and businesses across the UK receive support with their energy bills this winter through the Energy Price Guarantee, Energy Bills Support Scheme or Energy Bill Relief Scheme (for businesses and non-domestic properties).

But what many landlords may not realise is that, for those who charge tenants – usually in HMOs – either electricity as part of their rent, or have ‘all-inclusive’ arrangements with their tenants, it is ‘expected’ that the £400 provided by the Government’s various energy bill support schemes this winter will be passed on to them.

This follows a concerted campaign by some MPs and lobbying groups on the issue in recent weeks, who have claimed that some ‘dodgy landlords’ will pocket the cash rather than pass it on – albeit supported with little evidence that this might happen.

Read more: Landlord leader: Charities are ‘scaremongering’ over £400 bills support scheme

On launching the initiative, the now-former Chancellor Kwasi Kwarteng said: “This legislation is intended to ensure support from the Energy Price Guarantee, Energy Bill Support Scheme, or Energy Bill Relief Scheme (for commercial landlords) is received by the end user in cases where intermediaries procure energy on their behalf in accordance with the terms of regulation.

“For example, the legislation will require landlords to pass benefits to tenants with further details of the requirements under this legislation to be set out shortly.”

Debt recovery

But after reading the Act, which is now law, it is evident that Ministers want to develop regulations that will give tenants for whom this does not happen the right to either complain through energy regular OFGEM or chase their landlord for the ‘debt’.

LandlordZONE has approached the relevant department (BEIS) for comment, which told us that: “The Government will introduce regulations to allow end users to recover any benefits they are due as a debt if they do not receive them by a specified period. This means that end users will be able to pursue recovery of benefits through civil proceedings.

Complicated

But the scheme, although well-intentioned, is likely to be complicated for tenants to navigate and difficult to implement.

Sean Hooker (pictured), Head of Redress at The Property Redress Scheme, says he has written to the Government and Trading Standards to clarify their understanding of how this will all work.

He says: “The problem is that as the ‘bills’ are incorporated into the rent and that therefore is a contractual arrangement. It all depends on what the tenancy agreement says.

“A lot of existing rents also would have been set before the tariffs were increased, so the tenant is probably benefitting from this. Landlords can put up rents via a Section 13 notice but determining whether their increase includes the £400 will not be straightforward.

“The only situation I can see this working is where the landlord surcharges the tenants the energy bill and even here they cannot charge more than the unit charge they are paying, which I assume should include the discount.”

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