Water charging in the PRS

Current situation

This month (January 2012) has seen the Department for Environment, Food and Rural Affairs (DEFRA) has published a consutlation setting out proposals for how landlords, as owners of residential property, to discharge their liability for water charges to their tenants as occupiers and users of the utility.

The NLA is discussing the issue with members (through our current survey here) and will be responding to the consultation in due course (our response will also be availble on line). 

The Issue

In 2009 the then Government commissioned a review of charging for households water and sewage. That review published its final report later that year. One of the main issues raised by the reivew was significant amount of bad water debt affecting the water industry. Figures for 2010/2011 point to over £1.6 billion is outstanding water charges, which the industry estimates adds an average of £15 to every water bill. 

The focus on the private-rented sector has come from the analysis of the Family Resource Survey by the water regulator, Ofwat, which indicates that 80 per cent of those reporting themselves as being in water debt live in the rented properties. 

Critically water is unlike other utilities in that it cannot be legally disconnect a water supply (due to the provisions of the Water Industry Act 1999) and must pursue non-payment of water bills through the courts. The Flood and Water Management Act 2010 made landlords jointly and severally liable for water and sewerage bills. The NLA successfully argued that landlords should be able to discharge their liability by providing water companies with some simple tenant details to help providers identify the actual water user and therefore the person responsbile for the water bill.

The Government has now published a consultation looking at how regulations should be developed to enable landlords to tell water companies who their tenants are for the purposes of discharging their liability.

There are many details that the NLA wants to discuss with government:

• What are the minimum details necessary for water companies to be able to identify the right customers and landlords to discharge their liabilities;
• What timeframe will landlords have after the start of a tenancy to contact their water company;
• What mechanisms can be developed to enable landlords to do this quickly, cost-effectively and without undue additional administrative burdens; and 
• Whether there is a better way of achieve the same outcome.

Water companies, through their industry body Water UK, are in the process of developing an online portal that would enable landlords to provide the relevant information easily. The NLA will be working with them to ensure it has landlord input. 

Getting your views

The NLA is interested in the views of landlords on this issue. We have developed a short survey to identify views around some of the salient points. You can contribute to the survey here.

We have asked DEFRA to brief landlords and so they have produced a one-page briefing landlords (attached). 

You can also contact the policy team at: policy@landlords.org.uk