Can’t afford advance payment to property management company for communal heat and electricity!

PriesstesHN

Hi - I’m helping a friend work through this…she rents in a new build in London that has a communal electricity and heat network so has fallen through the gaps on the majority of government support schemes for the cost of living crisis.

Utility bills are charged, in advance, via the property management company on a quarterly basis and then reconciled twice a year once actual bills are received by the property management company.

They want an upfront payment that she just doesn’t have money to pay. 

Because she is renting she has an additional layer that everything comes via the estate agent.

The property management company have stated that a reduction in the unit rate has been applied now the government has confirmed some details for community energy networks via the Energy Bill Relief Scheme. (1st November government confirmed regulations that heat suppliers required to pass on benefits to end consumers). 

Not looking for advice around what benefits might she be entitled to, how to heat the human not the home etc - I can talk through that with her - specifically wondering how she navigates not being able to afford this upfront advance for energy bills. Really grateful for any thoughts. 

MovingForwards

Has she asked if she can pay monthly and explained she wasn't aware it was quarterly billing?

EssexHebridean

What does her rental contract say about the payment schedule? If she has onky recently moved in, and wasn’t told about it being quarterly, then I’d suggest that although it’s something she probably should have checked, she’d have a fair basis for having assumed that it was going to be monthly in arrears. If she has recently moved in and has now had it sprung on her that it’s quarterly in advance, then I suggest that as said, she negotiates at least this first payment being split over three months, but she will obviously need to be also budgeting ready for the next quarterly demand as well. 

It might be worth her registering on here and going to the Debt Free Wannabe board for some budgeting/expenditure advice if this is going to be an ongoing problem. 

PriesstesHN

MovingForwards said:

Has she asked if she can pay monthly and explained she wasn't aware it was quarterly billing?

She’s asked the estate agent if she can set up a payment plan but they’ve said no. 

PriesstesHN

EssexHebridean said:

What does her rental contract say about the payment schedule? If she has onky recently moved in, and wasn’t told about it being quarterly, then I’d suggest that although it’s something she probably should have checked, she’d have a fair basis for having assumed that it was going to be monthly in arrears. If she has recently moved in and has now had it sprung on her that it’s quarterly in advance, then I suggest that as said, she negotiates at least this first payment being split over three months, but she will obviously need to be also budgeting ready for the next quarterly demand as well. 

It might be worth her registering on here and going to the Debt Free Wannabe board for some budgeting/expenditure advice if this is going to be an ongoing problem. 

So she has been there a while so knows the advance bill is quarterly. The problem is in the past the advance quarterly bill has been manageable but has now jumped to over £600, significantly more than she was paying previously and she can’t afford it.

Part of the reason for the massive increase is all the cost of living issues going on with energy and the fact her utility bills fall between the gaps as she has communal heating and electricity - so the Energy Price Guarantee, the Energy Bill Support Scheme don’t apply. The Energy Bill Relief Scheme does apply, and the property management company have sent a letter sating the unit prices have been adjusted. They have provided these although I’m not sure what they have based them on. But government guidance, as far as I can tell, states that heat suppliers are required to pass on the benefits to end consumers in a “just and reasonable way”, it provides a list of how this can be done and reducing the fixed and variable charges in the next bill is an option which I assume is what is happening in her situation. 

I’ve asked her to send over her contract so I can take a look to understand it a bit better - might have more questions once I’ve seen it!

Noted re the Debt Free Wannabe board - thanks. 

EssexHebridean

The next question then is how much is the increase? Presumably she has the amount that has been payable previously available at least - also, how much notice have the agents given her of the next payment amount? There may be something in her contract about variable fees needing to be notified in a fair and timely manner. 

It might also be worth her chatting with her neighbours - I bet she won’t be the only one in this position! She could also contact her local council to see if they still have discretionary funds available - although she may fall through the gaps for this as well, it’s worth her asking. 

She will also need to re-do her budget to take account of the next quarterly bill possibly being slightly higher even than this one. 

ariarnia

i know shes been going thru the estate agent but could she go direct to the management company with the offer to pay. i dont know what its like for her but we rented several places over the years and a few times found estate agents just wouldn't pass on any requests that would make more work for them or had set things up that worked best for them and the landlord and we thought it was the other who wanted things that way. 

MWT

ariarnia said:

i know shes been going thru the estate agent but could she go direct to the management company with the offer to pay.

In this case I doubt the management company will know who she is, they will be billing the landlord, and it is the landlord that the estate agents are protecting...

Can always try reaching out to the landlord directly if she has any contact information, but the estate agents can be very good at preventing direct contact as that is what they are paid for...

mmmmikey

What a horrible situation to be in

Is the issue that your friend can't afford to pay at all, or is the issue the advance payment?

Assuming your friend could afford to pay monthly in advance, I would suggest that she proceeds as follows:

1. Tell whoever she pays the bill in writing to that she can't afford to pay quarterly in advance, but she can pay monthly in advance. She recognises that this isn't in accordance with the agreement but unfortunately that is all she can afford.

2. Split the bill into 3 and start paying it monthly in advance. Don't wait for agreement, just do it.

(The key thing here is to be completely honest and painfully reasonable. That will make it difficult both morally and legally for the other party not to agree.)

3. The ball is then firmly in the court of whoever she is paying to respond however they choose. With a bit of luck they will just accept the reasonable offer. If not, then post back here and we can work out what to do next.

Although your friend will be naturally anxious, they can't just throw her out and there will be plenty of time to sort things out. Once the ball is firmly in their court, if they don't accept your friends payments they will start to incure all kinds of legal costs so they have a powerful incentive to cave in so I expect that is what will happen. If it doesn't, best to cross that bridge when you come to it rather than speculate about a number of possible next steps on their part.

Not a lawyer so just my view on how you could proceed - good luck to you and your friend

PriesstesHN

EssexHebridean said:

The next question then is how much is the increase? Presumably she has the amount that has been payable previously available at least - also, how much notice have the agents given her of the next payment amount? There may be something in her contract about variable fees needing to be notified in a fair and timely manner. 

It might also be worth her chatting with her neighbours - I bet she won’t be the only one in this position! She could also contact her local council to see if they still have discretionary funds available - although she may fall through the gaps for this as well, it’s worth her asking. 

She will also need to re-do her budget to take account of the next quarterly bill possibly being slightly higher even than this one. 

Ok so for the same quarter last year they asked for an advance of £223.93 (this year it’s £653.23 - the amount she can’t pay). I’m not sure yet if when they then came to reconciliation if the amount they asked for in advance was correct or not. I think this is going to be hard to figure out but I think may help us if we can!

In terms of notice I think she was given about 30 days to pay. Which they are now starting to chase for. 

I’ve got a copy of her contract - interestingly it doesn’t have any specifics about how bills are paid in advance, paid quarterly, come via this property management company…nothing. There is stuff about paying rent, what happens if she doesn’t pay rent, how long she has to not pay etc - nothing similar regarding bills. It says she is responsible for them, has to pay them, not to tamper with anything or change anything that might incur a cost, pay them when she ends her tenancy and they can take it out of her deposit if she doesn’t. 

There doesn’t seem to be any mention of notice regarding variable fees, it doesn’t even really seem to mention rent increases and how that might work. But I know she is coming toward the end of her second year there and the rent did go up after the first 12 month contract ended and before the signed 12 month renewal then started. 

Yeah I’ve said to see if there is a residents association or similar, and will note re saving for next bill but not sure how she’ll do that and live but I think she’s going to aim to leave as she can’t afford the rent anymore either really. 

Thanks so much - any other thoughts v happy to hear

PriesstesHN

mmmmikey said:

What a horrible situation to be in

Is the issue that your friend can't afford to pay at all, or is the issue the advance payment?

Assuming your friend could afford to pay monthly in advance, I would suggest that she proceeds as follows:

1. Tell whoever she pays the bill in writing to that she can't afford to pay quarterly in advance, but she can pay monthly in advance. She recognises that this isn't in accordance with the agreement but unfortunately that is all she can afford.

2. Split the bill into 3 and start paying it monthly in advance. Don't wait for agreement, just do it.

(The key thing here is to be completely honest and painfully reasonable. That will make it difficult both morally and legally for the other party not to agree.)

3. The ball is then firmly in the court of whoever she is paying to respond however they choose. With a bit of luck they will just accept the reasonable offer. If not, then post back here and we can work out what to do next.

Although your friend will be naturally anxious, they can't just throw her out and there will be plenty of time to sort things out. Once the ball is firmly in their court, if they don't accept your friends payments they will start to incure all kinds of legal costs so they have a powerful incentive to cave in so I expect that is what will happen. If it doesn't, best to cross that bridge when you come to it rather than speculate about a number of possible next steps on their part.

Not a lawyer so just my view on how you could proceed - good luck to you and your friend

This is helpful and a good idea thanks! Will suggest the offer of paying monthly.