Electric sub meters are popular in HMO buildings as a way to accurately track individual energy usage and allocate costs fairly. However, while these landlord meters can bring many benefits, they can also pose challenges for owners and tenants alike.
This is the fifth part of a series of articles where we continue to explore the experiences of Jim Haliburton, known as HMO Daddy, who installed Metro Prepaid electric sub meters in his properties, sharing insights and lessons learned along the way. He is an experienced landlord with over 100 HMOs and 1000 tenants.
These questions and answers are taken from his booklet called HMO PREPAY METERS: Everything You Want and Need To Know About Fitting Prepay Meters in HMOs.
It may do but we have had no experience of it deterring tenants. Although, we would be unaware as the tenants would not come and apply for accommodation if they know we charge them separately for electricity, i.e. bills are not all inclusive. We occasionally get asked what the electricity would cost and if it is a room we tell them it will not cost much, unless the tenant uses an electric heater or has a fridge or cooker. I do not meter the electric light for safety reasons and there is very little else which uses much electric unless the tenant uses an electric heater. The electricity used by a phone, laptop charge or TV is very little.
Let us take a step back and ask does energy conservation work? I would like to do my bit to save the planet and at the same time save on my heating costs. I have tried numerous energy saving measures in the 140 HMOs I operate where I provide 24/7 heating and hot water. Unlike most landlords I keep a weekly log of the energy used in each HMO by taking the meter readings and I cannot identify any change in the energy used before and after fitting conservation measures. To give an example, I took out 30-year-old boilers, which could have easily been repaired, and fitted an A rated boiler because I was told they were up to 40% more efficient. After replacing the boiler, I found there was no change. So how can an A rated boiler be up to 40% more efficient? I can only say what works in practice for me and very little does.
One thing that I find substantially saves energy costs is fitting prepay electric sub meters as using prepay meters halves the cost of the electric consumption in my HMOs. The greenest energy is the energy you do not use. A 50% energy reduction will be any landlord’s best contribution to saving the planet. Another way to save energy costs is by putting the heating on a timer. I find that having the heating on for only eight hours a day instead of 24/7 saves about 30% but upsets my tenants. Am I doing something wrong or does energy consumption not work in practice?
If you have underpaid, then the electric company can back charge you but they can only go back 12 months. If this happens then negotiate a 12 month payment plan so, in effect, you are delaying payment even further. If you compare it to buying things on credit cards where you get charged about 30% interest, then every year the company does not charge you, you are saving 30% or even more as they can usually only go back 12 months and if they do, if you ask you can have up to 12 months to pay so at a 30% interest rate you are effectively only paying 59p in the £1.
Keep quiet and do not complain. I monitor the gas and electric used in my HMOs by reading the meters every week. The usage in HMOs varies considerably with some using double what others use with no rational reason. With the low usage properties, I just count my blessings. In the properties which have high usage I try and find ways to reduce costs.
The way I can eliminate the cost of supplying heating in my HMOs is to fit electric heaters in each room. If you are only providing electric heaters then they have to be fixed. You can fit electric radiators/panel heaters, but I prefer to fit fan heaters that can be attached to the wall as they can be fitted high up so will not so easily get damaged or have soft furnishings pushed against them, which can happen with electric radiators/panel heaters.
If there is central heating in the property, I tell my potential tenants and it is also in my tenancy agreement that the central heating is not a contractual obligation on me as the landlord to provide and if it is provided it is either to be paid for by the tenants directly or only provided at the landlord’s discretion.
Providing you have provided a fix form of heating for your tenants and you are not telling your tenants that you are providing 24/7 central heating the cost of heating is down to the tenant. There is nothing in law that says the landlord must pay for the tenant’s heating in a HMO. There is some vague legislation that says that the heating must be affordable but this probably is mainly applicable to single lets. Like so much in this business the rules are not clear-cut and very much depends on interpretation.
I do not want my HMOs to become damp and mouldy so I provide background heating. I state in the contract with my tenants that where central heating is fitted, it is not contractual obligation for the landlord to pay for, the central heating, it is provided at the landlords discretion. This gets round the problem of tenants de- manding the heating be on 24/7 even in the middle of a heat wave so they can dry their clothes on the radiator. In practice when tenants have to pay for something they rarely use it. Like kitchens in most of my HMOs, the heaters are not used because the tenants have to pay. As regards to kitchens the tenants do not have to pay to use the kitchen in my HMOs but most of my tenants do not cook. How and what they eat after 30 years of being a HMO landlord I have yet to discover.
Jim Haliburton has written a book on fitting prepay meters in HMOs entitled, “Everything you Need to Know About Fitting Prepay Meters in HMOs”. It can be obtained as a free download or as a paid for book only at www.hmodaddy.com.
Jim Haliburton, known as HMO Daddy, is not an electrician, energy conservation expert, lawyer or financial advisor, nor does the following represent legal, financial or any other advice. If such advice is needed, then the reader should seek professional guidance from a qualified expert with appropriate public liability insurance. The following information is given to the best of Jim Haliburton’s knowledge and is provided for educational purposes only. It is the reader’s responsibility to obtain their own professional advice.
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