New regulations will increase a landlords’ regulatory burden for multi-let buildings which have centralised heating or cooling systems. The regulations apply to landlords of all buildings, both commercial and residential, containing more than one tenant if heating, cooling or hot water is supplied from a single source and is charged to the tenants by the landlord (e.g. through service charge or an inclusive rent), rather than the tenants being directly responsible for those charges.
It is not clear how much impact the new regulations will have on residential landlords, but it is important to be aware of the new requirements coming in and the key deadlines.
The regulations require any supplier of a central heating system:
- To register with the National Measurement and Regulation Office (NMRO) by 31 December 2015 and to supply certain technical information at the time of registration. The information required includes the location, number and type of buildings and meters supplied by each communal heating/cooling system, together with an estimated total annual figure for installed heating capacity, heat generated and heat supplied;
- To install individual meters for each occupier by 31 December 2016 unless it is not cost-effective or technically feasible to do so. The regulations contain detailed guidance on these exclusions, which includes the requirement to reconsider every four years whether it is still not cost-effective or feasible to install meters; and
- To bill the tenants in accordance with their actual consumption.
There may be situations where if a tenant in a building has sub-let his premises to more than one sub-tenant, then the tenant will be the heat supplier and will be bound by the regulations.
If a heat supplier fails to comply with the regulations the NMRO may issue a compliance notice. Failure to comply with that notice may result in a fine. Failure to pay that fine within the time specified by the NMRO is a criminal offence.
Useful guidance and the relevant templates for information to be supplied on registration can be found on the National Measurement Office website.
If you are caught by these new regulations, longer term issues to consider will include whether you are able to recover the compliance costs from your tenants and whether your letting documents need to be amended to deal with these new requirements.
What action should you take now as landlord?
- Decide if you are the heat supplier for the building. Are you obliged to supply heating to the tenants in a multi-let building?
- Gather the relevant information to supply with your registration with the NMRO by 31 December 2015.
This article was supplied by Helen Wheddon, Partner, Stevens & Bolton LLP