Time is running out for landlords whose rents are inclusive of energy usage to pass on any price support received if it is ‘just and reasonable’ that they should do so, the Scottish Association of Landlords has reminded its members.
Price support received includes the £400 energy bills support scheme payment (in most cases this is paid in instalments of £66/£67 between October 2022 and March 2023) and the energy price cap guarantee on utility unit rates.
In most cases the minority of landlords who charge ‘energy inclusive’ rents will have shielded their tenants from energy price rises by not increasing their charges despite sharp increase in gas and electricity prices since April 2022. If such instances it is likely to be considered just and reasonable for the landlord to retain all the price support received, said SAL.
Government guidance on the regulations contains several examples of how to calculate how much it is just and reasonable to pass on.
‘In all cases the regulations require you to write to your tenants to notify them of what you are passing on (or to notify them that you don’t consider it just and reasonable to pass on any of the price support you’ve received). Tenants must be notified by 30 November 2022 about any price support received by the landlord up to 1 November 2022. Thereafter notification letters must be issued within 30 days of any future price support being received by the landlord’.
Energy Prices Act regulations require landlords to pass on energy price discounts irrespective of how tenants pay for their energy use. However, landlords may adjust the amount passed on based on their charges to end users but if they do so must demonstrate to tenants that the adjustment is ‘just and reasonable’.
There are no fines for non-compliance but tenants are able to bring civil proceedings to recover any amounts they consider have been unjustly withheld.