£3,600 unpaid tenant’s bill in landlord’s name?

£3,600 unpaid tenant’s bill in landlord’s name?

14:45 PM, 14th November 2022, About 2 months ago 11

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Dear fellow Property 118 members, Although we have a couple of residential properties, this unpaid tenant’s utility bill refers to a commercial property day nursery tenancy issue, but could equally apply to an AST, I believe.

The nursery suddenly advised us they had ceased trading, cleared the building, and are now effectively asking to hand back the keys and walk away, even though their occupational lease, being an FRI (full repairing and insuring) commits them to many obligations. The lease has over two and a half years to run and was in force when we took ownership of the property, about two years ago.

Once I gained authority to enter, I happened to meet the postman as I was opening the shutters, and he handed the mail to me, which I was simply going to place nearby for the tenant to collect.

I noticed that an EDF letter was addressed to us, that being the limited company landlord title at the nursery address. I then correctly opened this to find that a bill in the sum of £3,600 plus, as a “Final Account,” is, in fact, in our company name!

I immediately contacted EDF but got nowhere trying to establish how this has happened, and for how long, and then spoke to a specialist solicitor who advised that, although this could be a case of fraudulent misrepresentation, the bill may nevertheless need to be paid by us, due to difficulties getting an energy supplier to alter an existing account title, and that this is likely to apply, even after sending them a copy of the lease.

He suggests we should try to then get it refunded by the tenant, as the lease is still in force in law, despite them having left the property.

The tenant says the day nursery Ltd. company is to be liquidated, and that, as personal guarantor, she may also file for bankruptcy, and “doesn’t understand the bill situation at all”, but is not responsible. Obviously we take that with a pinch of salt, and have stated that, apart from other breaches of contract, she is responsible for all services.

While awaiting the return of our trusted solicitor from holiday, we are unsure how best to proceed in order to try to absolve ourselves of any responsibility for this gas and electric duel fuel bill which, to make matters even worse, also details an ongoing daily standing charge of around £8.00. Yes, £8.00!

We are now evaluating whether to auction the property, despite it having previously given excellent cashflow, due in part to inadvertently discovering this significant shock.

The members’ thoughts would be most welcome. Thank you.

Yours sincerely,

Andy.



Comments

M Choudhury

16:30 PM, 14th November 2022, About 2 months ago

I would advise to write a complaint to Edf and if its not resolved to your satisfaction to take the complaint to the ombudsman.

Claire Smith

17:18 PM, 14th November 2022, About 2 months ago

For a residential AST, we found that evidence of the lease was sufficient for the energy company to accept that we weren't responsible. They need to record themselves as creditors in the liquidation.

reader

18:03 PM, 14th November 2022, About 2 months ago

Oh dear, but how familiar is this predicament, very in residential property lettings.

What I do in these circumstances is firstly, take a note of the long meter number and trace via the national data base who is the registered supplier. Contact that supplier to confirm the correspondence. You will not make any initial progress with the first line officers of the company but you need to email them a photo of the meter including the long meter number explain who is liable and send them an electronic copy of the lease. You might want to also send all the contact details of the person liable. When you have no effective answer then initiate the companies compliant procedure. On no account give them your own contact details other than your email address and unfortunately any such details in the lease. They will likely proceed with outside debt collection agencies once again stick to email and go through the same routine.

In future I suggest if you know when the next people take over the property you give the registered supplier their details and ask them to take you off record.

In my experience British Gas are the worst by a long mile while I found Edf helpful.

Unless court proceedings are started against you avoid solicitors. The idea of paying and seeking the money back from someone who is broke is daft. You mustredirect the debt to the correct debtor.

A big caveat watch out for your crediting rating as this debt might be registered against your record. It is easy to check your own record via Money Saving Expert.

Good luck

TheMaluka

7:37 AM, 15th November 2022, About 2 months ago

EDF dfid exactly the same to me but only for £3,000. One of my tenants had not paid the electricity bill for five years so when he passed away EDF decided that I personally should pay his bill. Six months later the ombudsman decided in my favour but it was a hard fought struggle.
The bill you have is not yours fight it to the last penny.

Osamah Shaheen

2:09 AM, 16th November 2022, About 2 months ago

Hi Andy,

If you have previously not received any energy bills for the property where the Nursery was operating, and the nursery was running for a long period, then I am assuming that the energy bills were in the nursery business or business owners name up until you found the EDF bill in your name.

If that is the case then the arrears and in fact on going bills (until the lease ends or the tenant is legally released) are not your responsibility.

Unless the limited company that operated the nursery is actually liquidated and struck off, then the limited company is still responsible.

Utility companies collections departments regularly switch names on energy bills to landlords in the hope that some will pay, or at least start to pay. They have no legal right to do that, but they do. That is fraud or at least attempted fraud.

Send a copy of the lease by email to EDF and point out the termination date of the signed lease and remind them that legally EDF's ontract is with the party that ran the nursery who were paying the bills, also that the ease and the relationship between the lessee and EDF will be depended upon in any defence required to be presented to a court should they attempt debt collection through the court. Also tell EDF to stop the attempts to fraudulently reassign the debt to you, slso that such actions are harrassment and proof of such activity will also be presented to.and depended upon in any legal defence or counterclaim.against EDF.

I suggest that you try to set up your email to generate delivery or read receipts for the email you send or list yourself or any third or other email address in the email CC or BCC list so that you attempt to confirm delivery receipt of the email to EDF)

You say that the lease still has a long period to run and that you have a personal guarantee from the person who operated the nursery. Unless you legally release the company and personal guarantor, then they are still on the hook for the energy bill for the duration of the remainder of the lease period or until you release them, perhaps by renting the property to a new tenant. Otherwise the only way for the limited company to exit responsibility for any bills, liabilities relating to operation of the nursery is to actually complete liquidation, be desolved, wound up or be bankrupted.

Unless you have entered into a legally contracted relationship with EDF then you are not liable for the arrears or on-going energy bills.

By the way, under the Data Protection Act, and GDPR you cannot, and in turn should not release any personal details of the person, people who own the limited company that operated the nursery except as detailed within the lease.

Then it is for EDF to chase the limited company that is signed up to pay the energy bills at that

As advised in other comments, do not give any of your personal details.

I would also point out that the lease is your out if EDF attempt to take the matter to court, though notification of the existance if the lease might not stop EDF from harrassing you for the debt in the short term.

All the best.

Regards

Osamah

Duffy

8:56 AM, 17th November 2022, About 2 months ago

Brilliant comment

Accommod8

13:48 PM, 17th November 2022, About 2 months ago

Thank you Osamah particularly, and others for your constructive thoughts, especially on data protection.
The tenant has now just filed an application to Companies House for voluntary liquidation (surprise, surprise), with Gazette advertising imminent, so we are presently minded to object to the dissolution on the grounds of fraudulent misrepresentation, but also as rental has now become overdue, and for other reasons, given that the lease continues in force because it suits us to possibly market the property with a current lease in place, in theory.
When our own solicitor returns from holiday on Monday we will decide how to handle the deception aspect which appears to have occurred, and we can hopefully press the tenant into finding the funds to come to a settlement and demonstrate that they have either paid or accepted full legal responsibility for their own duel fuel and all other "services" bills.

Osamah Shaheen

15:27 PM, 17th November 2022, About 2 months ago

Andy,
If asked about the current tenancy you will have to notify prospective purchasors of the property as to the circumstance and goings on with regard to the lease abd lessee, otherwise you could be liable for misleading a purchaser. However, under the basis of Cavest Emptor, buyer beware, it should be up to the buyers solicitors to undertake due diligence.

Whether you object to the liquidation is up to you, however if you have a personal.guarantee from the owner of the business and limited company through which the nursery operates, then that is your leverage. It is that and the potential of bankrupting the party that is your leverage. If they think that you would go that far, with or without objecting to liquidation of the limited company, personal bankruptcy can and usually does demolish all financial resources, indeoendence, credit, etc.

I suggest you speak to your accountant and solicitor or accountant and or a solicitor who has experience of company law, bankruptcy, leases, finance, etc. And work to ffind the best most appropriate formula for your circumstance. Including the option of selling the property, if thst us something you are considering.

All the best.

Osamah

Judith Wordsworth

10:32 AM, 19th November 2022, About 2 months ago

The salient point, I think is, you bought the property from someone who may have had a full repair & insuring rental agreement with their tenant, the nursery, BUT it might have been a rental agreement which included gas & electricity in the rent. If this is the case then the vendor would have just changed the company name responsible for these utilities ie yours, on completion. Ask EDF when did you supposedly take over the supplies? Does it match the completion date? If this is the case your “trusted” solicitor would have/should have made you aware in their report on title. If they did not then claim against their liability insurance. A nursery will have high utility costs. If it does not ask EDF who transferred the utilities into your company name and when. In whose name is the water supply out of interest.

Accommod8

10:47 AM, 19th November 2022, About 2 months ago

Hi Judith,
Thank you for your comment.
We purchased it a short way into a 5 year lease with the Limited company day nursery having signed an occupational FRI lease with back up as personal guarantor, in which a full section specifies total tenant responsibility for all utilities, including servicing costs and repairs, for example, to include boiler replacement if needed. It couldn't be clearer to them.

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