I have been renting a one bedroom flat for three years, and most of my bills are included as part of the rent.
Although the rent is higher than it might otherwise be, this arrangement is perfect for me as it means I have never had to worry about organising council tax, water or energy bills.
But with energy bills having skyrocketed in the past few months, my landlord has sent me an email asking me to pay a one-off charge of £400 to cover the increase.
Double whammy: Our reader who has just been hit by a £100 a month rent increase has now been asked to fork out £400 to cover the rising energy costs
Given that he already increased my rent from £1,000 to £1,100 a month in January, this feels like a real kick in the teeth.
But I am worried that if I don’t agree he will serve me notice and I’ll be forced to find a new place to live.
I would really appreciate any advice on how I should respond and whether I am within my rights to refuse. Via email
Ed Magnus of This is Money replies: This is a difficult situation. On the one hand, your rent has recently been increased by £100 a month – which would probably be more than enough to cover the rise in energy bills on a flat of that size.
Therefore, you feel that being asked to fork out a further £400 seems unreasonable.
However, your landlord may argue his actions are justified and that the two rises cover separate costs.
In 2021, average asking rents outside of London rose by 9.9 per cent according to Rightmove.
And a record increase in global gas prices saw the energy price cap rise by 54 per cent on 1 April. For those on default tariffs that would equate to an average increase of £700 per year, reaching almost £2,000.
Bigger bills: This graph shows the typical rise in energy bills for households on default tariffs (around 22million people), depending on their home’s EPC energy efficiency rating
Being a one bedroom flat, the cost will likely be below the average. According to Ofgem a smaller property of one or two beds will see annual energy bills rise by around £420 a year.
However, this will vary considerably from household to household depending on personal usage and whether the property is energy efficient.
Most rental agreements will exclude bills to avoid this very issue. However, some landlords do decide to include bills as part of the rent.
It can make sense for landlords with lots of properties, as it means they don’t have the hassle of changing suppliers and making sure bills don’t go unpaid between tenancies.
It can also be tax efficient for a landlord to include bills as part of the rent, because they can deduct energy, water and council tax from the rental income before paying tax.
So is our reader within her rights to refuse her landlord? If there is no clause within the tenancy agreement allowing the landlord to charge for extra energy costs, then she can technically decline.
But this may not be the shrewdest course of action given she wants to remain in the property.
To help in answering our reader’s dilemma, we spoke to Al Mcclenahan, founder of Justice For Tenants, Ewen Buntingproperty expert at estate agents James Pendleton, and Wayne Sevenshousing adviser at Shelter.
Can a landlord make such a demand?
Justified? The landlord may feel that given rising energy bills, they are within their right to pass on these increased costs – but they must follow what is set out in the tenancy agreement
Wayne Sevens replies: If the landlord is asking for a one-off payment to cover the energy price increase, whether you have to pay may be determined by the rules in your tenancy agreement.
I’d suggest checking this to see if the landlord can make additional charges in addition to what’s included in your rent.
If the tenancy doesn’t mention anything, you can politely decline your landlord’s request to pay the £400.
Could the landlord increase the rent instead?
Ewen Bunting replies: The good news for you is that as an assured shorthold tenant you should be protected against a sudden change to what you pay your landlord.
The chances are when you agreed to the £100 rent rise at the start of the year you will have done so as part of a new fixed-term tenancy agreement, probably for a year.
As an assured shorthold tenant, you should be protected against a sudden change to what you pay your landlord
Ewen Bunting, James Pendleton
Under this contract your landlord must keep the rent at £1,100 a month unless there is a specific rent review clause.
Alternatively, as you have been living in the property for some time, you might have a rolling monthly tenancy agreement.
In this case, unless a rent rise was agreed in your contract, your landlord would need to issue you with a notice under section 13 of 1988 The Housing Act to increase it — and they are only allowed to do this once a calendar year.
Could the landlord evict her?
Al Mcclenahan replies: As you wisely pointed out, if the landlord is facing increased energy costs it is a reasonable possibility that he will seek to evict you when the term of your tenancy ends.
The landlord could then replace you with a tenant who will pay more rent to account for the increased energy prices, or more likely pay their own bills.
Section 21: Landlords are still able to evict tenants without any reason – although they must wait until the fixed term of the tenancy agreement ends
No-fault Section 21 evictions, where the tenant is asked to leave despite not having broken any of the tenancy agreement rules, are still legal – though they may not be in 12 to 18 months’ time when the Renters Reform Bill comes into force.
This means that the protections against increased rent only last as long as the tenancy term lasts.
After this, your landlord can increase the rent or evict you for no reason.
Should the tenant pay the £400 bill?
Ewen Bunting replies: As you’re keen to stay in the property I would recommend going back to your landlord and seeing what you can negotiate.
Do your sums and present a compelling argument. Landlords are not allowed to charge their tenants more for energy than they pay their suppliers, so make sure this is not the case.
You might be able to bring this extra charge down, or make an agreement that it is spread across several months, giving you more security in your tenancy.
Al Mcclenahan replies: It may be that the wise approach is to try and find a middle path. If you want to stay in your home then negotiation will be important.
Perhaps you could offer to pay a small increased amount of rent going forward to account for the increased energy prices, but not pay the £400.
You can note that your rent has already gone up by 10 per cent during a cost of living crisis which may make your landlord take a more considerate approach, as well as pointing out if you have always paid your rent on time and kept your home clean and tidy.
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