Communal heating admin and service charges

rentalforever

Hi MSE Forum,

I am renting in a flat whereby the hot water and heating system is provided by a communal system (provider is VITAL ENERGI). My bill lists a number of items which make up the standing charge:

1. Operating and maintenance
2. Meter reading and billing
3. Sinking fund
4. Management, admin and audit

For the most recent bill covering a three month period the total cost is £119, of which £82 are standing charges (made up of the list above).

Whilst I'm not opposed to the idea of a standing charge as I would have to pay for this with other utilities, I am opposed to being charged for the "sinking fund" and the "operation and maintenance" fees as this is akin to me paying for some kind of insurance to cover pipes and the boiler for a conventional property.

Is it unreasonable for a tenant to be expected to pay for this?

Arleen

Clearly it was reasonable enough that you've signed a contract agreeing to pay it?

rentalforever

I didn't sign any contracts and was not given an option to opt-out (not that I have a choice). Nor was the concept of a district heating system explained to me by either my landlord or the energy company. I was not explained upfront what the charges would be.

In fact I received no bills for approximately six months (despite requesting one) after moving in due to a dispute between the management company of the estate and the energy provider.

da_rule

Not unreasonable at all.

Firstly, would you want to be using a system that wasn't maintained?

The sinking fund means that should something go wrong it will help protect you from a large bill. Paying a bit now would be preferential to getting a bill for potentially thousand of pounds out of the blue.

Also, the freeholder (potentially via a management company) has an interest in protecting the structure of the building and all communal areas/equipment including the heating system. Therefore they need to ensure that the system is being maintained and that there is money put aside to cover any damage/repairs. And they aren't going to pay for it.

If you had bought the property then the these charges would have been explained as part of obtaining the lease. I would assume (and I'm happy to be wrong), that you were told the same information on taking out the tenancy.

da_rule

rentalforever wrote: »

I didn't sign any contracts

You have no tenancy agreement?

rentalforever

I signed a tenancy agreement but nowhere did it mention there was a communal heating system and what the charges upfront would be. However it did say I would be liable for the utilities. Whilst yes I could have done some research to check or asked the question but I had no reason to investigate this as I had never even heard of the concept of a communal heating system to even think to ask - I expected I would be able to choose my utility supplier as I have been able to with my broadband and electricity.

When renting other properties in the past I was not held responsible for paying any insurance or "sinking funds" in the event something went wrong with any part of the heating system. I would expect maintenance costs like that would be paid for by the landlord or the landlord would pay for an ad-hoc service as required if something went wrong with the boiler for instance.

davidmcn

da_rule wrote: »

The sinking fund means that should something go wrong it will help protect you from a large bill. Paying a bit now would be preferential to getting a bill for potentially thousand of pounds out of the blue.

In what circumstances would you expect a tenant to be responsible for fixing the central heating? On our planet, this is a landlord cost.

Also, the freeholder (potentially via a management company) has an interest in protecting the structure of the building and all communal areas/equipment including the heating system. Therefore they need to ensure that the system is being maintained and that there is money put aside to cover any damage/repairs. And they aren't going to pay for it.

Yes. The leaseholder (i.e. the OP's landlord) should be paying for it. It is probably reasonable for the tenant to meet the cost of the energy consumed - given that's no more and no less they would be responsible for with a conventional heating set-up.

I suspect c0ck-up rather than conspiracy.

da_rule

As the system falls under the ownership of the freeholder and is obviously charging the leaseholders these charges it would appear that the landlord is making you pick up the bill. The being responsible for utilities clause is, as you undoubtedly know, is a standard one. It would appear in this case that this is being construed to include the communal heating system.

I take your point, that maintaining a water supply and the heating is a responsibility of a landlord, however it may not be possible to split the elements (usage and other costs). Also, if you do manage to get out of paying an element, then you may find that when your tenancy ends (which I assume is in the next 6 months or so), you may find your rent goes up by a similar amount.

da_rule

Are there gas safety certificates for the system? As there could be other failings by the landlord as well.

rentalforever

da_rule wrote: »

As the system falls under the ownership of the freeholder and is obviously charging the leaseholders these charges it would appear that the landlord is making you pick up the bill. The being responsible for utilities clause is, as you undoubtedly know, is a standard one. It would appear in this case that this is being construed to include the communal heating system.

I take your point, that maintaining a water supply and the heating is a responsibility of a landlord, however it may not be possible to split the elements (usage and other costs). Also, if you do manage to get out of paying an element, then you may find that when your tenancy ends (which I assume is in the next 6 months or so), you may find your rent goes up by a similar amount.

Fortunately there is a reasonable amount of transparency once you do get a bill. All line-items have a definition and priced individually.

I have raised it via the agency who tried to brush it off as "it was in the contract for you to pay the utilities" but I didn't accept that and they've escalated the query to the owner. Not yet had a response but as you say, they may increase rent charges when my contract comes to an end should I decide to renew. Although the cost increase of doing that may outweigh the costs of getting another tenant in (e.g. agency fees, property being vacant).

rentalforever

da_rule wrote: »

Are there gas safety certificates for the system? As there could be other failings by the landlord as well.

There is no gas piped directly to the property. There's some communal heating system that serves the estate. There's some kind of boiler-like object in the utility but it's bolted shut. I suspect its a meter and some kind of pump for feeding taps and radiators. Readings are done remotely so I can't even independently verify the readings although my actual usage is extremely low (based on the costings above you can see my winter heating/hot water bill is only £30 out of a £118 bill and that's at a pricey 5.3p/kWh rate)