Landlords in the UK are increasingly installing district heating systems, which supply heating to multiple buildings instead of having a boiler in every home, as part of a drive to spend millions of pounds of energy-efficiency subsidy before December.
But lawyers are warning that landlords which sign up to district heating contracts with energy supply companies without consulting properly risk tenants challenging them if they have to pay charges for heating.
If consultations are not carried out, tenants’ heating bills could be capped at a rate of £100 a year under the Landlords and Tenant Act 1985, meaning landlords or energy companies would be liable for the remainder.
The Department of Energy and Climate Change’s heat strategy estimates that heat networks supply 172,000 domestic buildings – the majority of which are social housing and tower blocks. It predicts such systems could meet about 50% of all England’s heat demand.
Ian Manders, deputy director at the CHPA, said: ‘There has been a rush of social landlords signing up to district heating schemes so they could be included under the community energy saving programme.’
It is thought that in at least two cases tenants have successfully challenged their landlords – although the details of these cases have not been made public.
Simon Bagg, a senior associate at law firm Lewis Silkin, said that if landlords aren’t following the correct procedures the contracts could be ‘a ticking time bomb’.
Rhianna Wilsher, a solicitor at Trowers & Hamlins, said ‘The Landlord and Tenant Act was not drafted with long-term district heating arrangements in mind and it is important that a landlord considers section 20 consultation requirements at the earliest opportunity,’ she said. ‘Appointing heat suppliers on long-term arrangements for new build schemes may be complicated if there are no tenants in occupation at the time that the agreement is procured and signed.
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