Landlords face paying tenants’ unpaid energy bills

Landlords could become liable for their tenants’ gas and electricity bills if energy suppliers are left without accurate details when occupants move.

The revelation comes in a consultation paper published by Ofgem alongside the Budget which would place a legal obligation on landlords to provide that information.

The government’s wording makes the condition clear: liability could arise where neither the tenant nor the landlord has supplied the necessary details.

Separately, it has been revealed that letting agents face requirements to report landlords’ rent income and personal information to HMRC.

Energy debt liability

The consultation paper says: “Government will introduce legislation to Parliament to reform the home moves process, placing a new obligation on landlords to provide timely and accurate information to their supplier when tenants move into or out of a property.

“Where neither the tenant nor landlord has provided the necessary information, landlords may become liable for energy charges associated with the property.

“The reform would place similar obligations on landlords as exist with respect of water bills in England and Wales.”

Unpaid bills mount

The Telegraph reports that research found that up to 40% of around £6bn in domestic energy debt is down to tenants moving between properties without settling their bills.

Ofgem has warned that the total could reach £11bn in the coming years.

The proposals, also backed by the Department for Energy Security and Net Zero, would help suppliers identify the people responsible for unpaid charges.

The watchdog found that, alongside households unable to pay, some consumers could afford their bills but were unwilling to settle them.

Prepayment meter controversy

Domestic energy debts stood at about £1bn in 2020, before rising prices put household budgets under pressure.

Suppliers subsequently accelerated prepayment meter installations, with nearly 100,000 homes forcibly switched under court warrants and other households’ smart meters changed remotely.

In 2023, Citizens Advice reported record numbers of people going without heat or electricity because they could not afford to top up.

The government intervened after revelations that British Gas debt collectors had forcibly entered homes to fit prepayment meters, including properties occupied by vulnerable customers.

Letting agents face landlord income reporting

Meanwhile, it has been revealed that landlords’ rent income and personal details would be passed to HMRC under new reporting requirements for letting agents.

The Telegraph reports that government documents set out plans for property managers and tenancy protection schemes to share information with HMRC.

Alongside the amount of rent received, the information would include landlords’ dates of birth, National Insurance numbers and tenancy details.

HMRC already issues more than 10,000 notices a year demanding information from letting agents, but the government describes this as ‘a manual and resource-intensive process’.

Expert questions separate reporting

Greg Tsuman, the managing director for lettings at Martyn Gerrard, told the newspaper that the combination of the landlord register and reporting requirements would create an ‘unmanageable’ situation for agents and landlords.

He said: “The rental database should provide that central source of truth that would allow HMRC to deliver on the objective of collecting the right amount of tax from landlords.

“Rather than creating another disconnected process, why not invest that same resource in ensuring that the rental database works for all, in the most cost-effective way for the taxpayer?”