Coventry City Council has introduced a licensing condition requiring landlords or managing agents of Houses in Multiple Occupation (HMOs) to hold the utility accounts in their name. This applies to gas, electricity, water and council tax, with an exception only for HMOs let to a cohesive group of full-time students on a joint tenancy. This is a notable shift in regulatory approach that investors should watch closely.
From a risk management perspective, the council’s move aims to prevent issues arising from tenants falling behind on utility payments or disputes over bills. By having the landlord hold the accounts, the council can ensure better control and quicker resolution of supply and payment problems. However, this also transfers a new operational responsibility and potential cost liability onto landlords, who must now manage these accounts directly.
For investors, the practical impact depends on the current arrangements. Many HMOs have utilities in tenants’ names to avoid landlord liability for unpaid bills. Changing account holders means landlords must monitor consumption more closely and potentially handle arrears themselves. This could increase administrative overhead and cash flow risk, especially in larger HMOs.
The exception for student groups on joint tenancies recognises the different legal and practical dynamics in those lets, where tenants often share responsibility collectively. Outside this, the policy signals a trend towards tighter council control of HMOs to improve standards and reduce tenant harm, which may spread to other local authorities.
In summary, Coventry’s condition illustrates a growing regulatory focus on utility management in HMOs. Investors should review their portfolio compliance and consider the financial and operational implications of taking on utility accounts. Failure to adapt could lead to licence breaches and enforcement action. Staying ahead of these changes will be key to maintaining HMO profitability and compliance.
Source: Property118
