There has been little publicity about The Heat Network (Metering and Billing) Regulations 2014 (as amended by The Heat Network (Metering and Billing) (Amendment) Regulations 2015) which are being phased in but the majority commenced on 18 December 2014 and 31 December 2014.
Contents
Who Do the Regulations Apply To?
The duties under the regulations apply to a “heat supplier”.
A landlord is a heat supplier if ALL of the following apply-
- there is distribution of thermal energy in the form of steam, hot water, or chilled liquids from a central source in a building (e.g. a gas boiler)
- the thermal energy is used to provide heating, hot water or cooling
- the building is occupied by more than one final customer
- the landlord bills more than one occupier for the heat or hot water that that person has used (or a proportion of).
This type of system is known as “communal heating”. A typical example would be if a communal boiler is supplying heat to a block of flats in a single building.
Domestic HMO Accommodation
The first guidance issued stated that the regulations also extended to “… rented accommodation with a single heat source supplying multiple dwellings including houses converted into flats/bed-sits …”.
In the previous version of this page, it was our view that despite the earlier guidance, where a landlord lets bedsits all-inclusive and does not charge for the heat, the regulations were NOT triggered because there needs to be “more than one final customer“. We received comments saying we were incorrect (see the comments below) and we also received an email from BEIS asking us to change or remove this article which we refused until they explained why we were wrong. In their email to us they said:
The Regulations apply where there is fair expectation for the provision of heat. Therefore, it does apply where the cost of heating is included in the rent. …
Since then, we have received further communication from BEIS and they have updated their guidance. The text of what has been sent to us is available here but for the purpose of this part of the article, it is clarified that in a shared HMO, the regulations do NOT apply (as we maintained throughout although for slightly different reasons). In fact, they go further than even we were suggesting and even if heat is charged for in bed-sit lettings (individual tenancies for individual bedrooms), the regulations don’t necessarily apply. The updated guidance now says:
For the purposes of domestic heat supply, a user is considered a final customer where they occupy a partitioned private space intended to be used as a domestic dwelling where it meets all of the following criteria:
- It has a living and sleeping space
- It has sanitary facilities (including washing and toilet)
- It has cooking and food preparation facilities
Spaces that do not meet all of these criteria such as houses of multiple occupancy or most university halls of residence where some services, such as cooking, are shared are therefore not considered within the scope of the regulations.
It is therefore clear from the guidance, in order to be a final customer, the dwelling being provided must be fully self-contained with its own living and/or sleeping space, kitchen and bathroom. If there are sharing of facilities, it will not be considered as being in scope of the regulations.
The regulations aren’t triggered by electric heating – even if the electricity is billed individually. This is because, in order for the regulations to apply, the distribution of thermal energy must from a central source in the form of steam, hot water, or chilled liquids.
District Heat Network
There is one other situation similar to above which triggers the regulations and a landlord could be a “heat supplier” known as a district heat network:
“district heat network” means the distribution of thermal energy in the form of steam, hot water or chilled liquids from a central source of production through a network to multiple buildings or sites for the use of space or process heating, cooling or hot water;
Duty to Notify
Where the landlord is a “heat supplier”, the landlord must notify the Office for Product Safety & Standards (OPSS). The notification must contain certain prescribed information including:
- the location of the communal heating;
- the estimated total heating capacity, heat generated, and heat supplied;
- the number of dwellings supplied;
- the number of meters or heat cost allocators installed;
- the number of final customers supplied;
- the name and business address of the heat supplier;
Although there is no prescribed form for this notification, there is a template that is suitable for this purpose.
The notification must be done at least once every four years.
Duty to Install Meters / Heat Cost Allocators
in a building with communal heating, the heat supplier must ensure that meters are installed to measure the consumption of heating, cooling or hot water by each final customer.
This only needs doing if it is cost effective and technically feasible to do so and there is a tool to help establish whether installing meters will be cost-effective and technically feasible.
In respect of a shared HMO property, the FAQ accompanying the scope guidance states:
5.4. Do we need to meter every room in a House of Multiple Occupancy (HMO)?
Such arrangements are out of scope, if residents share at least one of: a kitchen (or cooking area), a bathroom (including a toilet), and a space for living and sleeping in.
A review of cost-effectiveness and technical feasibility must be carried out at least once every four years.
Ongoing Duties
Where anything is installed which would be required by these regulations (meters, heat cost allocators etc.) they must be continually operational and properly maintained.
Billing
Where any bill is provided to a final customer, it must be accurate and based on actual consumption. If requested by the customer, the bill must be supplied electronically.
The requirements of any bill are contained in regulation 9 and schedule 2 and include the following requirements-
- at least once a year the bill must be based on an actual reading (exceptions apply where an estimated reading can be used)
- bills must be issued at least quarterly if provided electronically or at least six monthly otherwise
The bill must contain certain information including-
- current energy prices charged to the final customer by the heat supplier;
- information about the final customer’s energy consumption;
- where available, comparisons of the final customer’s current energy consumption from the heat supplier with consumption for the same period in the previous year, if possible displayed in a graph; and
- contact information, including website addresses, for organisations from which information may be obtained on available energy efficiency improvement measures and technical specifications for products which use energy.
A charge may be made for producing a bill but no profit may be made from the charge.
This is only a summary of the requirements of any bill that is issued and the regulations (including the amendment regs.) should be consulted.
New Builds
The regulations contain requirements for new build blocks of flats or bedsits requiring meters to be installed where the heating is to be billed separately.
More Information
The guidance page on the heat networks legislation provides a more useful guidance for landlords who may be affected by these rules.
- See the amendment regulations which changes the date from 30 April 2015 to 31 December 2015. ↩
What if the landlord pays the heating on a prepayment top up meter but caps the amount he pays each month. Eg. Anything above say £60 a month the tenants are to share equally. Does the regulation apply in this instance?
If they are on separate tenancies on a room by room basis, I can’t see why the regulations wouldn’t. For the regulations to apply there needs to be more than one final customer which there seems to be in this instance.
so where there are student properties and the agent charge an all inclusive rate and then pays the bills, does this still apply?
As long as the tenant is never billed for the heating which is generated by a boiler (or something which distributes energy by steam or hot water) then no, the regulations do not apply. It only applies where the landlord bills the tenant for the heating.
But where compliant meters are installed (i.e. any new build), it is a requirement to bill (“where heat meters or heat cost allocators to which these Regulations apply are installed, the heat supplier must ensure that bills and billing information for the consumption of heating etc. by a final customer are accurate, based on actual consumption and compliant with requirements of schedule 2”, so this isn’t correct).
What is meant by a ‘room heating radiator’? Does that mean it excludes radiators that heat corridors/areas that are not considered ‘rooms’? Does it mean that if one room is heated by two radiators, only one of them needs a HCA and TRV? Or does it just mean, all radiators within the dwelling?
So does a single house that is rented to 6 occupants that are unrelated, but are on a single tenancy agreement, and pay for their utilities directly, have to comply to the new regulations?
No
This is incorrect advice. The regulations do apply to an all inclusive tenancy. The purpose of the regulations is to move away from this type of arrangement and bill tenants for the actual amount consumed. I would seek proper legal advice!
The statutory guidance says:
However, if the tenants are on a single joint and several tenancy, there cannot be more than one bill (because the heating is for a single house not a single room). In order for the regulations to apply there must be more than one final customer being billed.
Where the tenants are individually let on a room by room basis then the position is less clear and likely to fall under the regulations.
Hi, I am a manager of supported accommodation centre (hostel). Our residents are on an excluded licence agreement and pay a fixed rent figure each week, part of that rent includes a service charge for heating/lighting of communal areas which is ineligible for housing benefit. They do not get billed for anything and we as the landlord pay all the utility bills. Do we fall under the new regulations? any advice much appreciated. thanks
Because your electricity is identified separately on an individual person basis you may well be caught by the regulations.
The electric and gas bills are in the charities name, one bill. We are similar to a HMO, they share a communal kitchen, there are no cooking facilities in their bedrooms. The weekly rent figure is all inclusive so to speak (apart from food). It’s short term supported accommodation for homeless young people.
We live in a block of 40 privately owned leasehold apartments which were build three years ago.
Each flat has a heat meter.
The managing agents has recruited a company to provide the billing and heat sourcing. This company took over in January 2016.
My concern is that the company, without leaseholder agreement, added a one-off £30 ‘set up fee’ per flat and in addition is charging a ‘service charge’ which equates to over £100 a year. In a very environmentally sound property, this has more than doubled the annual gas costs for most residents.
The NMVO have not responded to any of my enquiries about whether the set-up charge or service charge are within the law, and I don’t know how else to check this.
Like you any emails or phone calls to the NMVO have so far gone unanswered.
This is an EU initiative…. but we are no longer in the EU, what now.?
Afternoon, Does this include a residential block of flats where there is a communal heating system…?
We received one bill from the utility company and recharge the lease percentage to the respective leaseholders.
I am finding the information provided so ‘fluid’ and not very clear when it comes to residential block management.
Note we have updated this article 4 September 2016
hi if the students pay the utility bill. can we lock the boiler room for safety issues and not allow them access to the boiler. the boiler and heating is on 24/7
Article updated December 2018.