Landlord Paying Utility Bills

Frogfish

Would someone knowledgeable about landlord responsibilities be able to confirm regards utility bills?

A landlord is currently paying the utility bills for a shared house occupied by several tenants. The tenants are currently paying money to the landlord for the utility bills as and when they fall due. The landlord is not contributing to the bills, the tenants are meeting the full cost.

The utility bills are not included in the rent as per the current arrangement and tenancy agreement.

Firstly, are there any problems with the landlord having this arrangement i.e. should either the tenants be paying them directly or the landlord including them in the rent?

Secondly, is the landlord supposed to include the utility bills on their tax return, and can they claim them as deductible expenses?

G_M

If bills are not included in th ent, then clearly tenants have o pay for th utilities.

What kind of tenancy is this?
* Are all tenants on a single "joint and several" tenancy agreement?
* or does each tenant have a separate TA?
* Is this a HMO?

Main potential issue is knowing how much is due to the LL? Does he show tenants the bills? How are they apportioned?

Tax deductable? No - nor is it declarable income.

cotleigh

I can't see why a landlord would do it like this, unless he is charging a "mark up" on the actual bills?

We rent out houses, and would never do it this way. We usually have the tenants paying the bills themselves, in their own names.

Unless the landlord is making a sneaky profit by telling the tenants the bills are more than they really are, its all downside for him:

1. he has the admin of chasing the tenants for the bill money, and,

2. if things go wrong, and he falls out with the tenants, and they leave, he could be stuck with some big bills to pay.

Frogfish

Hi, thanks. I would have to check with the tenants as I'm not sure if they're on a joint one or not, but it is definitely an HMO. They split the bills equally between them.

Landlord is showing the tenants the bills but insists they pay the money to him rather than direct to the utilities. They have also indicated that they may be including information about this in their tax return, but I cannot see why they would need to do this unless they were trying to claim it as an expense (when they shouldn't).

Frogfish

Hi cotleigh, thanks. Basically we can't see what's in it for the landlord either.

Furthermore they are restricting the utility companies that the tenants can use, again if the tenants are actually paying for the bills (not as part of the rent) surely they're not allowed to do this?

DreamerV

Could it be something really simple like he gets points back or airmiles or something on the bills? I recall being with a company that gave me airmiles, and one with nectar points. Maybe if he has several properties this would add up. Also are the tenants paying in cash. Sometimes, when me and my friends all owe money, I'll take their cash and put the whole amount on my card, and get cashback (not much, and my friends know this).

Or could it be that the landlord has had bad experiences with people not paying previously? So he wants to pay directly so he knows it's done?

It sounds a bit weird, but there must be a reason. I have a rental property and would not dream of taking on bills for the tenants and getting money back from them.

SavvyStudentSaver

It sounds to me like he's not declaring that he's renting, and is wary of any signs that other people are living at the property (ie, having their names on utilities). He may not have permission from his mortgage company either. Are the tenants on the electoral roll there, or registered for council tax there?

If it's no, then I'd be 90% sure he hasn't let his mortgage company, HMRC, etc know that he's letting. On the one hand, it means if he gets into trouble with his mortgage company, the tenant's have very little protection. On the other hand, it would feel very much like leverage to me (though that's probably not the best way to look at it).

Frogfish

The tenants also mentioned they have not received their council tax bill - I live in the same area and have already received mine - it did seem like a potential red flag along with the bills issue.

Thanks for your help guys - hopefully it's as simple as DreamerV suggests!