New regulations turn up the heat for landlords | Will you be affected?

22 July 2015

Just when you thought a landlord’s obligations could not get any more onerous, the Heat Network (Metering and Billing) Regulations 2014 have been implemented, imposing even more obligations and requirements on commercial and residential landlords.

Ruth Brewin, partner and head of commercial property, looks at what these regulations mean to multi-let landlords.

Just when you thought a landlord’s obligations could not get any more onerous, the Heat Network (Metering and Billing) Regulations 2014 have been implemented, imposing even more obligations and requirements on commercial and residential landlords.

The Regulations apply where the landlord’s building, whether commercial or residential contains more than one tenant and supplies heating, cooling, or hot water from a central plant to its tenants.  As a result, the majority of multi-let landlords fall under the constraints of the new regulations and need to start their preparations ahead of the looming deadline dates and potential criminal and civil sanctions that they may become subjected to.

The key points of the Regulations are summarised below, and provide landlords with details of what is required to comply with the Regulations.

Deadline for registration

The deadline of 31 December 2015 has been set whereby landlords are required to register with the National Measurement Office (NMO), and submit information on the location, number, and type of building and meters supplied by each of their communal heating systems, providing an estimated total annual figure for installed heating capacity, heat generated, and heat supplied.

Installation of indiviudal meters

By no later than 31 December 2016, landlords are required to install individual meters “heat cost allocators” for heating, cooling, or hot water for each tenant within their building unless, following a viability assessment it is deemed not cost effective nor technically feasible to do so. The viability assessment needs to be carried out before the deadline date in order to allow time for a meter to be fitted if necessary.

Billing

Once the individual meters have been installed for each tenant, tenants are to be sent accurate bills based on their actual consumption only. Information relating to energy prices, comparisons and the heat suppliers contact details must also be provided to the tenant, if it is technically possible and economically justified to do so.

Penalties

Should landlords choose not to adhere to the new requirements set by the regulations they could be facing a criminal offence, punishable by a fine and in addition to civil sanctions that will be imposed by the NMO.

Be prepared

In order to avoid such penalties we suggest that multi-let landlords begin collating all information on their building and communal heating systems in preparation for submitting their registration before 31 December 2015. Investigations should also be started into the cost effectiveness and technical feasibility of installing individual meters into their buildings ahead of 31 December 2016.

The NMO have issued guidance as to who and what are caught by the regulations in their Scope Guidance 9 (click to download document) but if you are a landlord and you are unsure whether the obligations under the new Regulations apply to you please call a member of our commercial property team  and they will be able to help you.


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