Understanding ‘Bills Included’ Tenancies

The Increasing Popularity of ‘Bills Included’ Tenancies

In the current rental market, ‘bills included’ tenancies are gaining traction. Offering an all-inclusive rental package, this type of agreement simplifies budgeting for tenants and can be an attractive selling point for landlords. However, as a landlord considering this option, there are several aspects you must keep in mind to ensure that your tenancy agreements are legally compliant and beneficial for you and your tenants.

1. The Significance of a Comprehensive Agreement

A. Crafting an Effective Tenancy Agreement

A robust tenancy agreement is the foundation of a successful ‘bills included’ tenancy. This legally binding contract between you and your tenant should clearly outline the terms and conditions of the tenancy, including the specifics about the inclusion of bills.

B. Legal Obligations and Your Responsibilities

As a landlord, you must ensure that your tenancy agreement does not contravene any laws or regulations. This includes understanding the statutory rights of your tenants and your responsibilities, such as ensuring the safety of the property, providing an Energy Performance Certificate (EPC), and protecting your tenant’s deposit in a government-approved scheme.

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2. Understanding Energy Consumption and Costs

A. Calculating Average Energy Consumption

When offering a ‘bills included’ tenancy, it’s crucial to understand and calculate the average energy consumption of your property. This will help you establish a fair and realistic rent that includes the cost of bills.

B. Energy Efficiency Measures

Implementing energy efficiency measures can help control the costs included in a ‘bills included’ tenancy. This could involve investing in energy-efficient appliances, ensuring the property is well-insulated, or installing a smart meter to monitor energy usage more accurately.

3. Navigating Council Tax and HMOs

A. Understanding Council Tax

Council tax is a local taxation system in the UK. As a landlord, it’s crucial to understand who is liable for council tax in a ‘bills included’ tenancy. It can be included, or excluded of the included bills depending on the landlords preference, but more often than not, the Tenants would remain responsible for this.

B. Complying with HMO Regulations

If your property is a HMO, it’s vital to comply with additional regulations. This may include obtaining an HMO licence, adhering to certain health and safety standards, and understanding your increased responsibilities.

Navigating ‘Bills Included’ Tenancies

Offering ‘bills included’ tenancies can be an attractive proposition for both landlords and tenants. However, it’s crucial to understand your responsibilities and obligations as a landlord, the practicalities of calculating and managing energy costs, and the specific considerations for properties classed as HMOs. By doing so, you can ensure that you’re offering a fair and legally compliant rental package that benefits both you and your tenant. Of course, it’s also vital you comply with the tenant fee act too

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Free Instant Valuation

See how much your property could get in rent.

Fee Saving Calculator

See how much you could save on property fees.

Yield calculator

Calculate your rental yield with our simple tool

Compliance checklist

Make sure your buy-to-let property remains legal.

Compliance Guide

Download your complete landlord compliance guide 

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Sam has a wealth of experience across the private landlord and Build to Rent sectors. He has advised a wide range of clients across the whole of London on how to find great tenants, improve their assets and effectively market their properties for the best returns.

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