Can tenants switch energy suppliers?

by Gary Whittaker

If you don't include the price of gas and electricity in the price of rent, it is up to your tenants to cover the cost. This means they need to be the ones to deal with energy suppliers, pay all bills and cover any deficit when they have left the property.

With the cost of energy being so varied depending on supplier, as well as some offering other services that can provide discounts to users, many tenants will want to switch gas and electricity to a supplier of their choosing.

This can be a good thing for tenants as they get a better deal and save money, which also means there may be fewer bills to settle when they leave the property, stopping the need to open disputes. However, it may also mean that your property ends up with a supplier you'd rather didn't provide energy, which means you need to go through the hassle of changing.

But can you stop tenants from switching the energy provider '

Tenancy agreements cannot block switches

The short answer to this question is no, you can't stop tenants from switching energy providers. It is actually illegal to put anything in the contract that states tenants are unable to choose a new energy supplier.

As the tenants are the ones using and paying for the gas and electricity, it is their right to select the company. This is the same for services like television, phone and internet.

List preferred suppliers

If you would like to encourage tenants to remain with specific providers or to choose through a small selection in order to avoid going with a supplier you don't agree with, you can give a list of preferred companies. This means that the tenant is aware of who you, as the landlord or letting agent, would prefer to provide gas and electricity to the property, which can help inform their decision.

However, you cannot enforce this list if they do choose to go with another provider. If they switch to a company that isn't on the list, you can request that they arrange for the energy account to be taken on by a supplier that is at the end of their tenancy.

Require permission

While you can't include a clause in the tenancy agreement that bars tenants from switching supplier, you can state that they need to get landlord approval prior to making a change. This means they will need to inform you of who they want to switch to and why, which allows you to look into the options.

It may be that the tenant has chosen the best option or that you find a better one to present to them. Whatever the case, it is important to note that you cannot decline their request unreasonably.

Having a clause like this in your tenancy agreement also means that you are always aware of who is providing energy to your properties, which is beneficial.

Property alterations

You should also ensure that tenants inform you before energy companies - or other providers - make changes to the property that could cause damage. If new meters or cables need to be installed, this can cause problems in the long-run, so you will need to be aware of this.

If your property does not have a pre-payment meter but an energy company needs to install one, you should ensure tenants tell you this straight away. It may be the case that they will need to pay for a standard meter to be re-installed at the end of their tenancy as pre-payment meters can put off potential tenants. 

They will need to be made aware that this is a requirement before entering into any agreements and sign documentation to support this clause.

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27-April-17Property Management