communal electricity

Gerry_S

we live in a house that has been turned into 4 leasehold flats each with their own gas and electricity meters. Separate to this, the four garages in a block each have a light and one socket and there are also 4 or 5 security lights, all of these are on a separate supply that we pay for out of funds in a maintenance account we all pay into and self manage. could you advise on the best type of energy account for this. can we have residential rates or would it be considered commercial?

doodling

Hi,

I can't answer your specific question but unless you have very trustworthy leaseholders I would be getting an electrician to put something like this: https://www.tlc-direct.co.uk/Products/RDCRED100.html on the supply to each garage and allocating the costs to each leaseholder proportionally.  It would be too easy for someone to take advantage of the fact it is a communal supply and use a lot more than their fair share.

eddddy

Gerry_S said:

can we have residential rates or would it be considered commercial?

A landlord's supply would be considered to be a commercial contract - so it would probably need to be on commercial terms.

However, my understanding is that:

• Domestic electricity contracts normally have 5% vat
• Commercial electricity contracts normally have 20% vat
• But in this case, you can make a VAT declaration saying that all the electricity is being used for domestic purposes. So the supplier can then charge 5% VAT

But I'm no expert on this - so maybe talk to your electricity supplier to make sure. 

doodling said:

Hi,

I can't answer your specific question but unless you have very trustworthy leaseholders I would be getting an electrician to put something like this: https://www.tlc-direct.co.uk/Products/RDCRED100.html on the supply to each garage and allocating the costs to each leaseholder proportionally.  It would be too easy for someone to take advantage of the fact it is a communal supply and use a lot more than their fair share.

I guess the question is whether the leases allow you to do this. (If not, the leases could be varied/changed to allow this as long as everyone agreed, but there would be huge legal costs, etc)

For example, a current or future leaseholder might refuse to pay what the meter said, and just say they will only pay 25% of the total bill - because that's what their lease says they have to pay.


(And/or you get into arguments because a leaseholder says their meter is inaccurate - and they want it tested, etc.)

EssexHebridean

This is definitely a "first refer to the Lease" question. 

In our block, the Lease states that the communal electricity (entries, stairwells and landings) is paid as part of the service charge, along with a share of the maintenance of the electrical installation. It is split evenly across all flats in the block.

Gerry_S

Thanks everybody. The electricity is paid as part of the service charge which is shared between the 4 leaseholders. My main query was wether it could be supplied at a domestic rate as opposed to a commercial rate which at the moment would make a tremendous difference in cost. Somebody suggested this would be possible but it is very difficult to assertain, any further advice is more than welcome. Thanks again.

QrizB

Gerry_S said:

My main query was wether it could be supplied at a domestic rate as opposed to a commercial rate which at the moment would make a tremendous difference in cost.

The supply will be flagged as commercial in the master database. You would need to convince your supplier to change this to domestic, and (as eddddy says above) communal supplies for flats considered to be commercial so it's very unlikely your supplier will agree to do this.