Student rent that includes utilities going up because of Increasing energy prices

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My son and his 2 friends (who will be starting their 2nd year study at University in Sept) signed a tenancy agreement for a 2nd year student property back in December. The tenancy is for a 12 month rental starting in August. Utilities are included in their monthly rental payment, and these utilities are limited by a fair usage policy. 

He has just been contacted by the letting agency saying that due to energy price increases they will now need to choose from one of the following 3 options. 

They say ''with the increase in energy prices you are likely to go way over the fair usage policy and end up with a very large bill at the end of your tenancy, so we’re getting in touch to give you three options''.

 

Option 1:         Remove the energy part of your tenancy agreement, we will reduce the amount you pay by the allowance for energy and you can secure your own utility contracts direct with suppliers.


Option 2:         Increase your monthly payments and we will increase your fair usage allowance by the additional amount you pay, so you will hopefully not have a large bill to pay at the end of your tenancy.

 

Option 3:         Continue with your tenancy as it is, knowing you will likely have a payment of approximately £500 each at the end of your tenancy. You will not be able to use your deposit against this amount.

 

If they choose option 2 - paying more each month to increase their Fair Usage Allowance



Number of Tenants

Gas & Electricity Allowance pa

Current

New

Extra


3

£1,798.68

£3,237.62

£1,438.94

The current fair usage allowance is £1,798.68 (which is included in the agreed rent) if the 3 students agree to pay an extra £9.20 each per week on top of this its an extra of £1,438.94 a year between the 3 of them. I know energy prices are rising considerably but £3,237.62 just seems an extortionate amount of money for electricity and gas for 3 students to pay for a small 3 bedroom flat and i assume they wont be refunded for any unused energy.

So we were wondering if instead option 3 is the best option as I ve read that the Fair usage allowance is quite generous anyway and if they use more some months hopefully they would still not be paying anywhere near the amount as if they agreed to the increase.

Any thoughts would be much appreciated as we re finding this quite confusing.


 

Comments

  • silvercar
    silvercar Posts: 47,094 Ambassador
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    Does the fair usage policy specify kWh or cost?

    if it is kWh then you need not agree to any changes. Just say you are happy with the contract as it stands. If it is a cost then you will hit the limit with about half the usage. You may want to try arguing that the amount specified is lower than what could be considered fair usage. Or you could accept option 3.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • Sophiejeb73
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    Thanks for your comment. The fair usage allowance is a cost, £1,798.68
  • silvercar
    silvercar Posts: 47,094 Ambassador
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    Speak to the university accommodation office. They may have information on this. I’m not sure whether anyone signing an inclusive contract, that uses the utilities reasonably, can be deemed to have failed a fair usage policy, just because the rates have gone up.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • theoretica
    theoretica Posts: 12,348 Forumite
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    Does the property have domestic rates supply or commercial - and if commercial would they be able to change to domestic if they chose option 1?
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