10 August 2015
Heat Network Regulations: advice for landlords
On 30 April 2015, the Heat Network Regulations 2014 came into force, with a requirement to charge tenants of multi-let buildings for heating or cooling based on actual consumption. Landlords of any multi-let building, commercial or residential, who rely on a communal system to supply heating or cooling to two or more tenants will be affected by the legislation.
The regulations apply to billing, metering and reporting of heating costs, and require landlords to install individual consumption meters. These meters must be installed by the end of 2016, unless it is deemed impossible to do so on prescribed grounds. Where possible, they also need to provide tenants with certain information on energy efficiency.
However, there are some exceptions to which the regulations do not apply; systems based on ducted air, systems which supply several buildings or only communal areas, or those that supply very short-stay occupiers (such as hotel guests) are all exempt from the legislation.
By 31 December 2015, landlords that are affected must notify the National Measurement and Recording Office (NMRO) of details of the tenants, the heating and cooling system being used, how efficient it is, and the billing arrangements of the property. They must then continue to update the NMRO of these details every four years.
Failing to provide this information can result in civil penalties, or even criminal prosecution for non-compliance. The NMRO is required to publicise any cases of non-compliance, and also has been given powers of entry to inspect any properties where it is believed the landlord is not compliant with the regulations.
Sarah McLoughlin, lawyer in the B P Collins property litigation team, commented: “The obligations in these regulations are going to be particularly onerous for landlords of buildings where the costs of heating and cooling are recovered under the service charge. It may also be necessary to amend leases to ensure that the landlord’s costs can be recovered.”