Utilities

The general starting position as to liability for paying utilities, including the electricity, gas, water, telephone and internet, is that the occupier or consumer is liable.

However, it is perfectly acceptable for a landlord to agree to pay some or all utilities if they wish. The terms of the contract should be clear on who is liable to pay which utility.

It is common for landlords of shared houses (in particular student lettings) to include all bills with the rent.

Sometimes, bills may be inclusive and paid by the landlord, but there may be an agreement that the occupier reimburses the landlord for some or all utilities. In this case, the contract should be unambiguous about the parties' expectations.

Sometimes a fair use policy is agreed although it can be challenging to determine what is fair use.

Electricity

If a landlord pays for electricity but then seeks reimbursement from the occupier, the landlord is governed by a 'maximum resale price', the same price as that paid by the person who is reselling it, including any standing charge.

When charging an occupier for electricity, the landlord must make reasonable attempts to ensure the cost is based upon usage. Still, you can give an estimated bill to an occupier in certain circumstances.

You can find more information and guidance on reselling and estimating electricity on the Ofgem website.

Water

Like electricity, water charges also have a 'maximum resale price'. Anybody who resells water or sewerage services (including a landlord) must charge no more than the amount the water company charges them. They are also allowed to charge a reasonable administration charge.

According to guidance for resellers issued by OFWAT:

The administration charge is set to cover administration costs and the maintenance of meters. It can only be charged if it is not recovered by any other arrangement, such as through the rent or mobile home pitch fee. Resellers can recover around £5 each year for those without a meter and £10 for those with a meter. The administration charge applies to each purchaser and not to each occupant.

More guidance for resellers, including what information any bill for water must include, can be found here.

Where the occupier is to be responsible for paying water charges, the landlord is legally obliged to pass details of the tenancy and the occupier's names to the water authority within 21 days from the start of the occupation. If the landlord fails to do this, they may be jointly liable for water and sewerage charges until they inform the water authority. See the section "Notify Water Authority" for more information.

Gas

Where there is a communal boiler that provides heating, hot water, or cooling and more than one final customer, any charging of an occupier is governed by The Heat Network (Metering and Billing) Regulations 2014 and must be based upon actual usage. Estimating the cost of gas used is not sufficient in shared houses.

Where there is more than one final customer, the landlord is known as a "heat supplier".

Any fair use policy also triggers the regulations.

The scope guidance to the regulations further confirms:

Charging for the supply of heat/hot water/cooling includes the supply as part of a package, paid for indirectly, perhaps through ground rent, a service contract or other means. Such a payment does not need to mention the supply of heat explicitly, but there will be a reasonable expectation by the final customer that heat supply is part of the service. Where a tenant currently has space heating, hot water or cooling included in their rent payments, they are still being charged for heat, and the person receiving the rent payment is a heat supplier.

Under regulations, there is a duty to notify the Regulatory Delivery (RD) with information about the heat supplier, the location of the communal heating and other details about the dwelling and heat being used.

Meters must be installed where possible but only where it is cost-effective and technically feasible.

If a block of flats uses a single boiler for the block, each apartment would likely require a meter to be installed.

Where there is a shared house and a single boiler, it's less likely to be cost-effective to fit meters in each room, in which case, a 'heat cost allocator' must be equipped to establish the actual usage of each room. These are small devices attached to a radiator and record the heat output allowing the landlord to determine use per room accurately.

You can find more detailed information about the Heat Network Regulations on the GOV.UK website.