Legality of electric Sub-meter

Dro19

Can someone please advise:

Private Landlord installed electric Sub-meter for the tenants in the building. 

I objected and one of the reasons I gave is my disability and the inaccessibility of the sub-meter as it needs a step ladder to reach it. They said it's not our problem. I told them I am more than happy to have a standard own meter and pay for my bills. Due to costs involved, they're unwilling to go that route. I started to pay extra with the rent to cover electricity but they were not happy with the amount so I told them to increase the rent and we agreed on the amount. I withheld rent payment due to disrepair etc. They immediately came without a notice or warning and installed the sub-meter.

I found out the Landlord is charging the tenants 55p kWh while they only pay about 23p to the energy provider. Also, the company running the Sub-meter is charging the tenants from 12.6% to 15.04% fees every time they top up. 

There are only expensive to run electric heat panels in the flats. No central heating. Hot water is communal.

Landlord withdrew court case for non-payment after they were advised counterclaim may be higher. I need to prove to Court in the counterclaim that this Sub-meter is illegal and try to prove the rent increase should be invalid because it was agreed on the same terms. 

I read that the Landlord is considered a Supplier and that they should not charge more than they pay. 

The Landlord at no point provided information about the charges, the tariff etc. and they think they are entitled to charge more to cover for the communal hot water (gas) etc. 

Do I have a case?

elsien

What does your tenancy agreement say about your utility bills?
Could you be a bit be a bit clearer about the set up?  Individual flats with communal hot water and no individual electricity meters sounds like a conversion of some sort?

Dro19

elsien said:

What does your tenancy agreement say about your utility bills?
Could you be a bit be a bit clearer about the set up?  Individual flats with communal hot water and no individual electricity meters sounds like a conversion of some sort?

Many thanks for the reply.

No mention of bills in the Tenancy. Bills were included when we moved in. 

"The Landlord agrees with the Tenant: To pay and indemnify the Tenant against al rates, taxes, assessments and outgoings in respect of the possess..."

The Landlord converted the house into 8 self-contained flats/studios without planning permission. Recently they obtained Certificate of Lawful Development. They know how to play the system. Only 2 flats are registered for Council Tax and known as addresses. They also let some of the studios as Airbnb. 

FreeBear

Dro19 said: I found out the Landlord is charging the tenants 55p kWh while they only pay about 23p to the energy provider. Also, the company running the Sub-meter is charging the tenants from 12.6% to 15.04% fees every time they top up.

I read that the Landlord is considered a Supplier and that they should not charge more than they pay. 

The Landlord at no point provided information about the charges, the tariff etc. and they think they are entitled to charge more to cover for the communal hot water (gas) etc. 

Do I have a case?

You are correct. The landlord should not be making a profit on the electricity that he supplies. BUT he should will be on a commercial tariff, and the unit rates that he pays could be considerably higher than this 23p. Unless you have had sight of one of his bills, you do not know for sure what the energy company is charging him.

As for the 12.6-15.04% fee for topping up, someone else will have to comment. Doesn't sound right or fair to me... As for communal hot water, this is one area that is open to abuse - How is he measuring your consumption ?

Dro19

FreeBear said:

Dro19 said: I found out the Landlord is charging the tenants 55p kWh while they only pay about 23p to the energy provider. Also, the company running the Sub-meter is charging the tenants from 12.6% to 15.04% fees every time they top up.

I read that the Landlord is considered a Supplier and that they should not charge more than they pay. 

The Landlord at no point provided information about the charges, the tariff etc. and they think they are entitled to charge more to cover for the communal hot water (gas) etc. 

Do I have a case?

You are correct. The landlord should not be making a profit on the electricity that he supplies. BUT he should will be on a commercial tariff, and the unit rates that he pays could be considerably higher than this 23p. Unless you have had sight of one of his bills, you do not know for sure what the energy company is charging him.

As for the 12.6-15.04% fee for topping up, someone else will have to comment. Doesn't sound right or fair to me... As for communal hot water, this is one area that is open to abuse - How is he measuring your consumption ?

Thanks for the reply.

Definitely on domestic tariff, Landlord before installing the Sub-meter, stated the electricity tariff at 27p kWh as they were monitoring my consumption via a monitoring meter. 

Legally speaking the Landlord became the electricity Supplier for the tenants in the building and should not charge more than they pay. An electricity supplier cannot include other charges like gas and water in the tariff. I may be wrong.

The 12.6-15.04% fees can be paid by the Landlord or the Tenant. The Landlord, of course, chose the tenant to pay it. 
Another thing with Sub-meter, the tenant is not entitled to any help with energy costs or government schemes. 

Scot_39

As a tennant 

In most of UK - you are still often renting in an inherently insecure short term basis.

Your not in control of most things related to your property.  Even more so in private splits like yours or even some larger apartment complexes.

But the application of business rates to domestic premises - has been a real issue highlighted in last 2 years. Read one article suggestig in varying forms impacts around 5% of UK homes are not on a normal domestic supply. 

And they should really be acting. Ofgem were looking into community supplies - often at commercial rates - aspects like yours not so sure.

Even if you "buy" a flat - most will be leased. And if leased - that for some includes the freeholder or their agents - controlling their utility supply etc.

Sub meters

All AFAIK fairly standard and normally perfectly legal (*). 

Could you not simply have asked for the meter to be lowered - when fitted ?

(The change of rental basis however - e.g. from rent inclusive to forced metering / paying etc - may allow you to challenge introduction. And their have clearly been other problems leading to legal situation.)

And I am guessing they may have outsourced the sub meter billing admin to another agency - again not abnormal.

Many tenants themselves prefer the idea of metering as well.  If not the overhead costs. (Imagine the potential for arguments - if estimated bill splits arbitrarily between say 8 flats or bedsits - maybe different sizes / occupancy etc - some may simply be profligate because they know others are subsidizing their use etc.)  

Rates 55p vs 23p

The landlord / freeholder - individual or company - probably shouldn't make a profit on rates.  Other costs could be added elsewhere - like as part of basic rent. 

It is also pretty normal for commercial landlords to be on business tariffs - and the prices can vary wildly - with some still playing catch up to last years records rates - and so 55p could in fact be correct and legal - if not exactly fair in your mind.  

So where did you get 23p from - if you are getting the 23p from last quarters average Ofgem cap rates - seen in media or online - those may sadly be completely irrelevant to your new supply situation.  100,000s if not millions live under non Ofgem capped rates. Rich and poor alike. (You can find it in a rented bedsit - or a purchased (leased)  £10m plus luxury flat in likes of London etc). 

If you believe otherwise - if you believe the landlord isn't asking you and other tenants to pay the correct rate - tenants are entitled to proof of the rates paid for main supply - so as this CA advice - ask for copy of the actual bill

https://www.citizensadvice.org.uk/consumer/energy/energy-supply/problems-with-your-energy-supply/what-your-landlord-can-charge-for-energy/

(*) You will note on topic of sub metering - CA link above covers unmetered and metered situations.

If on receipt of bill you find the charges are not correct - then again ....

Rates Were 27p

That may well have been the rate - it may even have been the domestic or commercial rate at the time - and commercial now.

But the choice of the supplier, the basis and the rate is entirely up to the landlord in many situations.  

As is the choice of sub meter administrator. 

And on rates - law is simply whether the charged rates - on your bills at any given time - match the current rates on the landlords.

And unlike domestic rates that have fallen quickly - many commercial rates have not.

Govt Help

If the landlords did get help - on a domestic tariff - then IIRC at least guidance - if not in end law legally - that reduction in cost - should be reflected.  

Most never paid rates linked to s[pot or short delivery wholesale - but some unlucky people did - paying weekly iirc spot rates - that saw gas prices increase by over 1000% mid crisis. Even 3m smoothed Ofgem cap rates went to near treble recent c16p+/kWh gas / c70p/kWh for electric prior to EPG discounts.

Your Own direct supply - not surprised landlord said no

You cannot simply have your own meter wired onto someone else's supply - and then have a normal domestic suppply contract. It's not just a different meter.

The local DNO charges to connect a new supply from home to the grid at street level - could be in £1,000s even for just 1 flat depending on complexity and region.  

Over 8 flats hardly surprising a landlord wouldn't volunteer to pay. 

Sub - Meter Admin Agency Fees

As to agency charges for administering the submeter payments - had no idea.

So did a quick google and one of the first named company sites that came up - went and hunted around their FAQs on charges and payment methods.  

Well in their terms - think I found and wording seemed a bit weird - but I think says they charge 10%+VAT - but also mentions 3% on top for Paypoint (local shops etc) commission elsewhere - if dont buy direct - and banking charges - are those per transaction ?.

https://metroprepaid.co.uk/terms-of-service/

And as you say - its a choice of client or occupant charge.

The total charge appears potentially in the normal ballpark.

But hardly seems fair to add onto already high rates - but as long as Ofgem and govt - allows it to continue - it probably will.  So

Write to your MP?

It's certainly maybe worth a letter to your MP - and asking him what if anything the regulator Ofgem may be planning to help tenants like you.

There has been some significant action on normal direct prepay contract rates - now the cheapest Ofgem cap - from the most expensive - in last 2 years after media / charity pressure - and so political will was their to act - so well worth an attempt to push the scope - if not already covered by Ofgem current work.

They are meant to be acting on or considering other non covered domestic supplies.

Hope you get it all resolved eventually.

There is nothing good of being the tenant of a landlord you don't have a good and trusting relationship with.  So if not resolved - even once is - if finances for other private or local HA availability permitting - you might perhaps want to look to find a better location to rent.

Dro19

Many thanks Scot_39 for your detailed and generous response.

The Landlord, private individuals, managing everything by themselves. No agency or third party involved.

Forgot to mention that not all of the 8 flats/studios have a meter fitted. Almost half half. Some tenants enjoy free bills. For example, no meter fitted for Airbnb and one AST tenant I know, so we are subsidising them.

I complained about the rate. They increased it from 50p to 55p recently. 

I found online who's the supplier for the property and found out the tariff and that the Landlord is paying around 23p kWh. Also, the Landlord themselves stated 27p.

When I enter the property details, the energy provider website states "The information you've entered relates to a domestic property" and "We've found a home energy meter".

Also, found on MSE this post:

https://forums.moneysavingexpert.com/discussion/comment/34351839/#Comment_34351839

matelodave

https://www.citizensadvice.org.uk/consumer/energy/energy-supply/problems-with-your-energy-supply/what-your-landlord-can-charge-for-energy/

and 

https://www.ofgem.gov.uk/publications/resale-gas-and-electricity-guidance-resellers