In this week’s #AskTDS, we answer a landlord’s question: “Does the deposit cover unpaid utility bills if my tenant does not pay them?”
In general terms, the landlord must show that they have suffered a loss in order to claim from the tenancy deposit. If the utilities are not paid, it doesn’t always mean that the landlord has suffered a financial loss. If prepared correctly, the utility accounts and any resulting debts would remain the responsibility of the tenant, not the landlord.
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.
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.
Additional considerations may also be required when dealing with water services. Again, responsibility may differ in different regions and in some cases the water board may make it the landlord’s responsibility to notify the transfer of name and not the tenant. If this is the case, it would be advised to ensure your tenancy agreement suitably reflects these requirements and you, as a landlord are aware of your 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 also 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.
Each month we publish an Adjudication Digest case study, which explains why an adjudicator has made an award to a landlord, agent or tenant. There are several case studies relating to bills under the ‘Rent, bills and fees’ menu on the left of the case studies page including a recent case study about communal heating and hot water charges.
For more landlord tips, please view our landlord FAQ page.
Tenancy Deposit Scheme (TDS) is a government-approved scheme for the protection of tenancy deposits; TDS offers both Insured and Custodial protection and also provides fair adjudication for disputes that arise over the tenancy deposits that we protect.
We provide invaluable training in tenancy deposit protection and disputes for agents and landlords through the TDS Academy as well as joining with MOL to provide the Technical Award in Residential Tenancy Deposits.
TDS Insured Scheme: where a TDS member can hold the tenancy deposits as stakeholder during the term of the tenancy.
TDS Custodial Scheme: where TDS hold the deposit for the duration of the tenancy.
TDS Academy: TDS provides property professionals with invaluable training in tenancy deposit protection and tenancy deposit disputes.
TDS Northern Ireland: TDS is Northern Ireland’s leading and only not for profit tenancy deposit protection scheme.
TDS can only comment on the process for our scheme, other deposit protection schemes may have a different process/require different steps. Content is correct at the time of writing.
These views are those of the author alone and do not necessarily reflect the view of TDS, its officers and employees.
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