Please advise on this matter

[martin_n]

Hi,

My regulated tenant who has been in the property before 1989 agreed to pay a fixed fee of £60 per quarter in the first tenancy agreement for a period of one year to the previous landlord for the utility bills (electtricity, gas and warter) and this rate is still the same as of today after 18 years, please note that there is no other tenancy agreement apart from the first one.

The tenant is staying in a self-contained flat on the first floor and the restaurant is on the ground floor, the gas and electricity meters are sharing with the restaurant, so it is difficult to estimate how much he is using.
Since I bought the property about a year ago, I did suggest to him to increase the rate or install seperate meters for the flat but the tenant refused both options. I asked the rent officer for advise and he said that because it was a self-contained flat so he could not include into the rent review, but he told me to get a solicitor and take him to court as he strongly believed that the judge would allow me to install seperate meters for the flat as it is unfair on me.

However, when I consulted the solicitor who helped me buying the property and he said that it was very unlikely for me to win because it was agreed in the tenency agreement.

I am not sure if my solicitor is correct or he may not understand much about this issue. Therefore, I would be very much appreciated if somone can give me some advice of what I should do or know who I can turn to get a definite answer because I do not want to take the tenant to court and do not have a slim chance of wining the case.

Thanks in advance.

[MrShed]

I would guess that after the initial year agreement that the tenant would then become wholly responsible for the utilities. This being the case, and I am not entirely sure I am correct, there must be some way of you being able to measure this cost for the tenant. As such I would be inclined to agree with your rent officer. Is the solicitor a specialist in property law? Can I suggest emailing PainSmith solicitors(ad somewhere on this site) with the query....they will answer it free of charge, and are generally highly recommended on this forum.

[martin_n]

Thanks for the comment MrShed. I will try to contact PainSmith solicitors to see what they say. However, before buying the property I was renting the restaurant on the ground floor and the previous landlord was happy for me to deduct £250 every quarter for the utilities the tenant was using. In a way, the previous landlord was losing out around £190 for the tenant and I am a bit surprised she did not take any action. I read the original tenancy agreement and there wasn't any anything suspicous apart from the landlord was happy for the tenant to pay a fixed rate as mentioned.

[lucid]

Here's the thread from the last time this was posted in September this year.


http://www.landlordzone.co.uk/forums/showthread.php?t=883&page=1&pp=10

The answers to your questions cannot really be answered here and I imagine are dependent, as stated earlier, as to the terms in the original contract during the contractual stage of the tenancy which is now a statutory periodic tenancy. As advised seek the counsel of a specialist property solicitor who will examine the said terms and give you an opinion as to whether they are still binding in this statutory stage of the tenancy.

Forget what the rent officer told you, a judge will not grant an order based on what is deemed to be unfair or not but will look at statute and relevant case law, go and seek proper advice.

Part 1 section 3 of The Rent Act:

(1) So long as he retains possession, a statutory tenant shall observe and be entitled to the benefits of all the terms and conditions of the original contract of the tenancy, so far as they are consistent with the provisions of this Act.

I think the key to the above is "so far as they are consistent with the provisions of the Act."

Looking at previous caselaw on this point...for example a term providing a bonus payment to the tenant on punctual payment of rent was deemed inconsistent with the legislation. (after going all the way to the House of Lords.) Whereas a case regarding a term requiring the landlord to provide central heating in the property and constant hot water for the tenant was deemed to be consistent with the act, so as to entitle the tenant to the benefit of it.

The only other way I can see is via Part 4 of the Act section 71. If the amount attributable to the utility costs is included in the registered rent as a variable service charge, but from your explanation of the facts this does jot seem to be the case.

Anyway that's all the relevant info I could find relating to your situation in The Act. As said previously your professional advisor may say otherwise.

I think that the agreement should have been checked thoroughly by a solicitor before purchasing the property, who should have told you, thus influencing your decision to purchase or negotiate a suitable reduction.

N.B.
a judge may rule in your favour allowing you to install the metering, (in order for accounting purposes) but you may still be responsible for the bills being in your name. At least it would give you the ability to work out for tax/cost purposes how much was being use.