Stopping supply to a customer in debt

[DoubleDecker]

Hi there

I'm new here and hoping for some advice.

I manage a not-for-profit company which is landlord and district heating supplier. One of our tenants has a large debt on their heating and hot water supply. We are considering stopping their supply in order to protect us from further debt. However, their housing officer suggested that we couldn't do this and we would be taken to court by the tenant - the judge never finds for the supplier, so would incur more costs.

I've tried searching for cases where this has happened but cannot find anything. Everywhere I look, the advice is that customers must pay or set up a payment plan, or face being disconnected if more than 2 months in arrears. They are over 18 months in arrears. It is also after 31st March, so the caveat that they can't be cut off in winter does not apply

The resident would still be able to have hot water as they have an emersion tank in their property and could put in electric or oil fire radiators, so we would not be removing all abilities to heat their home.

Is the officer simply trying to scare us off from disconnecting them or is what we are proposing "illegal" - whether actual or we would lose any court case.

Any advice/experience would be welcome! Thank you

[atticus]

Your company really should take professional advice on this type of situation. It really needs to understand the law on the areas in which it operates. There are clear risks in what you propose, and the housing officer is right to warn you of these.

[islandgirl]

I agree. In the magistrates court we give approvaly for customers with debts to have their homes entered and pay as you go meters installed. A court order is needed. I believe that LLs are not allowed to disconnect (I believe it can be considered illegal eviction?)

[R0b]

As I understand it, disconnection of a supply should be viewed as a means of last resort having exhausted other options and allowed the debtor an opportunity to repay the outstanding debt. You probably do need to seek advice as others suggested and I have limited knowledge so I'll just provide some pointers to think about.

1. You say that you are both a landlord and a heating supplier, but what you have not clarified is under what circumstances are you looking to disconnect the tenant from a heating supply, as the landlord or the supplier? If acting as the landlord, then you need to follow the terms and conditions of the tenancy carefully but as a minimum, you would usually require some form of written notice before disconnection. If acting as the energy supplier, then presumably you are regulated by OFGEM and the licence conditions and therefore need to ensure you don't fall foul of those licence conditions around disconnection.

2. You are correct that a supply cannot be disconnected between October-March (the winter period) if you are aware the customer is a pensioner or a vulnerable person or people under 18 living in the property.

3. As an energy supplier, disconnection of a supply can (in theory) be done after 28 days of arrears not 2 months, if I recall. However, it is my understanding that you should consider all other less draconian options before justifying a disconnection. First option would be to write to the debtor and try to reach a payment plan, allowing a reasonable period to respond and/or seek advice e.g. 30 days. Failing that or any response at all, you should consider having a pre-payment meter installed and following the necessary procedures to obtain a warrant to do that.

If a pre-payment meter is not viable, then a second notice to the debtor warning that failure to agree a repayment plan may result in disconnection of the supply and urge the debtor to contact you to discussing payment or payment plan. Again, allow a 30 day window to respond or seek debt advice. Failing that, you will need a warrant to disconnect the supply and I believe you are legally required to inform the debtor that you are applying for a warrant which would again offer an opportunity for them to contact you. Even if you get a warrant, you still need to give 7 days notice before turning up.

4. Whatever you do or don't do, document everything and keep a paper trail, otherwise you might find yourself being challenged for failing to follow the correct process or missing something you should have done if the customer/tenant claims not to have received anything or some other excuse.

To repeat, most of the above applies if you are acting as energy supplier, not as the landlord which I understand falls out of scope of OFGEM. Therefore if you are acting in the capacity as a landlord to disconnect the supply and have the right to do so under the tenancy agreement, the process would be much more simple so long as you strictly follow the contract terms.

[echat11]

If the tenant is a 'Vulnerable Customer' maybe advise them to seek a grant from the various grants out there e.g. https://britishgasenergytrust.org.uk/who-can-apply/

[DoubleDecker]

Thank you for your responses. I appreciate the time taken to reply.

To fill in a bit of background for the points raised...

We have repeatedly tried to set up a payment arrangement with the tenant. We put one together in January 2023, which they accepted was affordable, and then they didn't make a payment. We filed for a CCJ last summer, which was granted. We then offered a final arrangement before bailiffs were appointed, which was ignored. The bailiffs have visited the property once, that I am aware of.

Every letter, email etc is ignored. I finally got them on the phone 3 months ago, where they denied receiving anything from us in this regard - which is nonsense, as I post the letters in her mailbox myself, (and they received a compensation cheque from us - twice - without issue) and one of those letters was handed to them personally. They also made reference to the contents of one of the letters "they hadn't received". They made several provably false accusations and denied any responsibility for not paying. The debt has been increasing since August 2022, with only one payment made in the interim.

The only contact we have received from them since the phone call is an email to tell us they were going to speak to citizens advice tomorrow and to stop harassing them. We had sent them one email clearly laying out the situation following the call.

We are acting as energy suppliers in this regard. The rent is up to date (with the exception of a small amount of service charge). Part of the tenancy agreement is that the heat agreement (a separate contract) is adhered to. There is a statement in the heat agreement which says "We may stop supplying Our Services to the Property if:........You have failed to pay Your bills as they fall due.

We are not regulated either by OFGEM or the Heat Trust. However, we are a community based business and strive to work with our residents, rather than against them. We have a further 2 residents who are in lengthy arrears - one about the same and one a year longer. We have been extremely understanding of their situations and are working with them to reach a workable repayment plan. One of which we have done.

However, this resident simply refuses to engage or seemingly acknowledge that there is a problem. Which makes our position difficult. We cannot make her reply to us - even with a timescale or suggestion of affordability.

We cannot install a pre-payment meter - there is not one that is compatible with the system. We would have happily done this a long time ago, but searches and advice from the system engineers resulted in it not being possible. We also do not need to access the property to disconnect. The connectors are located in a cupboard in the communal area.

We have discussed taking legal advice, which we will probably end up doing. But we have very little money and our previous experience of taking legal advice is that solicitors have not stood by their initial advice and have backed away from a potential situation. So we are a little cautious about doing this again - seeing is as a waste of the precious little money we have.

We are looking for the cheapest, easiest way to bring this to a conclusion , which is why we are considering disconnection. The tenants can continue to heat their home and get hot water from the emersion, but the debt to us will not continue to rise and our production cost will reduce. However, the law seems to be incredibly grey and guidance very hard to come by.