Retrospective changing of tariff on Heat Network

cbmatheson

The Gaurdian have now published an article on this:
https://amp.theguardian.com/money/2024/jan/08/tenants-with-shared-heat-systems-shocked-to-be-back-billed-for-hundreds

musclebob

Thank you for describing your situation and for everyone that has helped thus far.

Something similar has happened to us recently where the managing agent have notified us that historic tariffs where incorrect, and that they will be issuing bills shortly (~1-2k per flat). It feels incredibly unfair and this forum has given us some ideas on what to investigate and question them on.

Realising it has been a while since the last post, has OP been successful in challenging the bill? It would be good to know which route to take.

cbmatheson

Hello. Thank you for following up. Unfortunately we have not yet been successful in challenging this. To do so I believe we will need to group together as residents and seek independent legal advice. The situation is complex with multiple parties involved so legal help will no doubt be expensive, but this may be a point we reach in time. It’s a pity we were unable to group together as residents earlier and make it clear we would not accept this.

For now I have paid my own "bill" under duress (they threatened our development with increased service charges and that we would not qualify for the next gas contract if people didn't pay, and have threatened individuals with 'management charges' - I have written evidence of all of this) and have notified the provider that I reserve the right to challenge in court.

The Property Ombudsman offered an award for service failures but they said the retrospective tariffs, and failure to adhere to the contract, were out of their scope. The award was also offered on a non-disclosure basis, which I declined. There is now an article on this matter (ombudsman and retrospective tariffs) in the i newspaper:

https://inews.co.uk/news/housing/property-watchdpgs-gag-homeowners-win-compensation-3011352

I am hopeful this coverage may open up further avenues to challenge.

In the earlier Guardian article Stephen Knight of the Heat Trust says:
“To my knowledge no one has yet tested their consumer rights in such a case in the courts,” ... “We have asked government, the Competition and Markets Authority and some local council trading standards services to take an interest and provide clarity, but so far none have done so.”

So in my view it's worthwhile continuing to highlight this issue to all of the relevant bodies involved – heat trust, property ombudsman, trading standards, leasehold advisory service, competition and markets authority, RICS, OPSS, local MPs etc – in the hope that some government body might step in and offer clarity on this issue such that managing agents can be more easily challenged on these behaviours and take responsibility for their failures in future. It seems particularly troubling that a precedent seems to have been set from management agents getting away with this last year and that it is still happening now (even becoming common practice).

cbmatheson

Hi,

To give a short update on this.

I applied to the First Tier Tribunal (Property Chamber) for a determination regarding this backdated price increase in June 2024.

(Although the charge will applied to both leaseholders and private tenants, the management company cited 'the lease agreements' to our MP as the lawful justification, which would make it a service charge).

I submitted our statement of case and associated documentation to the Tribunal in September 2024.

The management company's lawyers then wrote to the Tribunal with various procedural challenges/objections and requesting delays.

There was then a case management hearing in November last year, to which 2 barristers and 2 solicitors appeared for the various developers involved, and a new timetable was agreed.

In January 2025 the management company's lawyers suddenly ceased to act a few days before a filing deadline, but the company continued to pursue the charges.

They then missed deadlines to respond to the Tribunal. The hearing was delayed further due to their failure to respond.

The management company was then warned, and in May 2025 was formally barred from participating in the case.

I have now been notified that a hearing has been set for 10 October 2025, to which the other side has been barred from defending.

So there may be an outcome from this by the end of the year.

Xbigman

Many thanks for the  update.

I'm sure the technicalities of this case are a bit beyond what most readers of this site would be interested in, but I for one am fascinated. I wonder if this might set a precedent for futures cases. 


Darren 

cbmatheson

Hi,

If anyone happens to be following, this hearing took place at the First Tier Tribunal (Property Chamber) on 10 October 2025.

The panel reserved their judgement, saying it may take 3 months or so for a full written reasoned decision, due to the complexities involved - including jurisdictional uncertainties as to whether the charges can properly be considered 'service charges' (noting that was the lawful justification given).

Hopefully the decision will be published in the next month or so. The FTT case reference is LON/00AL/LSC/2024/0239

cbmatheson

Hello all,

The First-tier Tribunal published its decision on this case on 8 January 2026 - approx 30 months after the situation arose, and 18 months from the date of the Tribunal application, following extensive delays as described above.

The decision states:

(1) The Tribunal determines that the historical tariff deficit (“HTD”) charges in connection with heating and hot water provided to the Applicants are irrecoverable as service charges under the respective leases.

The amount of these charges was approx £198,000 across a 600 flat estate.

In addition to this, the Tribunal applied a 20% deduction to Rendall and Ritter's management fee for the period concerned.

The decision records admissions of failings by Rendall & Rittner, and also disallows £1,208.79 in wholesale disconnection, locksmith and warrant application costs which were passed on as service charge costs.

Unfortunately the decision also notes that the First-tier Tribunal does not have jurisdiction to order refunds of payments, so further steps may yet still required for residents to recover invalid payments made.

The decision is not yet available on the public Tribunals website but I believe it should appear there soon. For now I've made the link available on Google Drive - I'm unsure if I have permission to post external links here, hopefully this link can be accessed:

https://drive.google.com/file/d/1NzZvAPS-N0YEfDojgH8ga3XXMqYoMfAT/view

The decision is very detailed, however I hope this experience may be useful to someone.

QrizB

Thank you very much for coming back to update us on the outcome.

Hopefully you won't get any similar problems recurring in future.

danco

Very interesting. It looks as though this will affect charges in our block, though of course this will depend on the exact terms of our lease.

I live in a block of sixty retirement flats. It was only in October that we were presented with the final accounts for 2021-22, 2022-23, and 2023-24. We do understand why this happened and accept that the delay was unavoidable. In 2021-22 (and earlier years) the managing agent were Rendall & Rittner, but in later years the management was taken over by the freeholders.

The final accounts came in as very much larger than the original estimated budget on which the service charge was based, largely due to the electricity costs being much larger than anticipated. It seems that this was due to their undercharging the unit costs for our heat network.

The freeholder recently suggested that they could either leave the charges (heat network and service charge) as they were or retrospectively increase the heat network charges, and asked us which we would prefer. You might think that no-one would want their heat network charges increased. But in fact this would produce a corresponding decrease in service charge. So the total costs for the flats as a whole would remain unchanged, but some residents' costs would go up, others would go down. We decided for various reasons that we preferred to leave things as they are.

They informed us that they had taken legal advice and that it was permissible for them to bill us in the service charge for the electricity. They said nothing about the legal basis of the option of a retrospective increase in heat network charges.

It now looks possible that they are not entitled to put those costs in our service charge, though (as I said) we will obviously have to look at the lease.

Further, it seems from the Tribunal's decision that we should take a look at the management charges for 2019-20, 2020-21, and 2021-22, as the building was managed by Rendall and Rittner for those years (the flats were first available in June 2019).