The shockwave travelling around the property industry at the moment is that landlords of multi-let buildings who operate communal central heating systems are considered to be suppliers of heating, cooling or hot water and must comply with the Heat Network (Metering and Billing) Regulations 2014.

The introduction of the Regulations is staggered so, by 20 April 2015 (and then at least every 4 years), a supplier must notify the Secretary of State of the communal heating system and provide details of its location, the number and types of buildings and customers it supplies along with estimates for the yearly heating capacity, heat generated and heat supplied.

From 31 December 2014, where meters/heat cost allocators have been installed, suppliers must ensure that bills and billing information for the consumption of heating, cooling or hot water by a final customer are accurate and based on actual consumption.  This is going to be really tricky where service charges are apportioned in leases on, for example, a weighted floor area basis.

From 31 December 2016, suppliers must:

  1. install meters in buildings where there is more than one final customer and the building is supplied by a communal heating system, to measure consumption by each final customer (this includes all existing and new communal heating systems);
  2. if it is not cost effective or technically feasible to install meters, the supplier must install heat cost allocators and thermostatic radiator valves on each radiator, in order to calculate and enable each final customer to control its consumption.  Hot water meters must also be installed.
  3. if it is not cost effective and technically feasible to install cost allocators and thermostatic radiator valves, the supplier must use alternative methods of calculating charges for the supply of heating and hot water.

A breach of the Regulations could result in a fine of up to £5,000 per offence, plus daily penalties of £500 until the breach is remedied. However, no person will be prosecuted for a breach that occurred before 30 April 2015.  But there are also “naming and shaming” powers and the reputational harm that could arise is probably more of a concern for landlords. Do you have multi-let buildings?  If so, you need to know about these Regulations and you probably need to notify someone of your communal heating system soon!