Can my landlord charge more for electric?

[msjaffacake]

I'll try and explain as simply as I can. 3 years ago I started a job in a bathroom showroom. (Lets call it A) My husband has been working there approx 10 years. The owners are husband and wife. The plan was for me to come onboard, learn what I need to then buy the business with my husband, and they retire. We have a pretty good relationship with them, and they are pretty fair.
So on the 1st May we finally bought the business. We are Directors (they are still Directors until things are finalised, but have no say in the actual business)
They own the building with the flats above paying them rent. Since they bought the building, their business ( that we now own) paid "themselves" , as a separate entity/company.(B) Now we would pay the B rent. They would get the bill for the electric, pay British Gas, then we would pay the owners. They've put the rent up by £200pm (£800 to £1000) as conveniently their not paying for it. So essentially their getting a £1000pm extra income. The issue I have is the electric. I don't see the actual bill from British Gas, B produces an invoice for A, and then we pay it to B. But it just has a total for that month. She had said she'll add 10% on for "admin". So basically were paying for the electric we actually use, plus 10% for her gain. I read it was illegal to charge more than what you use, but is it a loop hole, because they are technically paying it, and were just repaying them back? It's really bugging me, as it just seems more like greed, and I feel we're over a barrel, because they know we'd have to pay it, otherwise the business would cease. I don't want to ruin the relationship before I've even started, but it's really bugging me. Do I just shut up and take it?
Thankyou for any replies

 

[fisicx]

This should have all been sorted out by your solicitor before you paid the money. Too late now.

They can bill you for whatever they want. What you need to do is get your own meters and remove them as directors today.

It seems as if they stitched you right up.

 

[msjaffacake]

This should have all been sorted out by your solicitor before you paid the money. Too late now.

They can bill you for whatever they want. What you need to do is get your own meters and remove them as directors today.

It seems as if they stitched you right up.

They will be removed as directors when all payments/invoices are done for April. Then they take their share of what's left in the business account, as anything up to May 1st is still their money. A contract was legitimately drawn up for that side of it. That is separate from the rent/electric. Nothing to do with business contract. The rent/ electric has been paid up to May 1st from the business that's still theirs. The next one will be June 1st. So I have not paid anything as of yet.

 

[fisicx]

The utilities should be part of the lease. That’s the document you need to look at.

You still need your own meters.

 

[msjaffacake]

The utilities should be part of the lease. That’s the document you need to look at.

You still need your own meters.

The meters are on the premises. They are smart meters so she can get the readings remotely through the app, or website. To rent the space is £1000. Electric is separate/extra. Which is fine. I'm just wondering if she can add on a margin to electric if the electric is billed to their company name (B) and not directly to our business (B). I can't exactly say, I want the British Gas bill to come directly to me, and not go through them, a middleman so to speak. I suppose they want to use the bills to put against their tax bill at the end of every year.

 

[Newchodge]

The meters are on the premises. They are smart meters so she can get the readings remotely through the app, or website. To rent the space is £1000. Electric is separate/extra. Which is fine. I'm just wondering if she can add on a margin to electric if the electric is billed to their company name (B) and not directly to our business (B). I can't exactly say, I want the British Gas bill to come directly to me, and not go through them, a middleman so to speak. I suppose they want to use the bills to put against their tax bill at the end of every year.

The lease should set out what happens to the utility bills. Yes, they can charge a premium when it is a commercial property.

 

[fisicx]

The meters are on the premises. They are smart meters so she can get the readings remotely through the app, or website. To rent the space is £1000. Electric is separate/extra. Which is fine. I'm just wondering if she can add on a margin to electric if the electric is billed to their company name (B) and not directly to our business (B). I can't exactly say, I want the British Gas bill to come directly to me, and not go through them, a middleman so to speak. I suppose they want to use the bills to put against their tax bill at the end of every year.

This will all be defined in the lease. If the meters are for the business premises and not the flats then you should get the bill. If the meters are for the whole property you need to get new meters. Talk to the solicitor who negotiated the lease.

 

[Paul Kelly ICHYB]

I'm just wondering if she can add on a margin to electric

As highlighted a couple times - what was agreed in your purchase agreement?

 

[Stephen Ball]

I will reiterate what others have said - it all depends what's in the lease agreement.

However - it is quite common for commercial landlords to recharge tenants for energy when the individual premises/areas do not have their own mains supply. This can be done with sub-metering, or any other way agreed by both parties - such as floor space or percentage splits if sub-meters don't exist.

Regarding this being illegal, you have most likely referred to domestic properties. In these instances it is not allowed for a private domestic landlord to charge a premium for the energy to a tenant (they can however make a 'reasonable' administration charge).

You may be able to obtain your own supply, however a word of caution, the cost of this could perhaps be very expensive and hurt short term cash flow - because new connections are paid for upfront, together with added metering costs perhaps. This cost may take some time to pay back compared to just taking the supply, albeit at a premium, from your landlord.

In your case, if the lease agreement says they can add a 10% margin onto the electricity - then that's what you should be charged. BUT- this gives a conflict of interest because it does not incentive them to get a good deal - if anything, based on a percentage uplift, it incentivises them to get a worse deal because they'll make more money.

Perhaps challenge them on seeing a copy of the actual supplier bill for your own records and determine if the charges are competitive.