Student House - Utility Bills

[Supergluerules]

Hi, hoping for some advice on how to manage bills in a shared house when they are not included in the rent or provided in a package by the letting agency?

My DS is suggesting they all take on one utility and then set up standing orders into each other's accounts to cover the bills. I'm worried he'll end up with gas or electric and if the others don't cough up, the bill lies with him - especially given current costs.

There are companies that offer to bundle it up, but I suspect they charge over the odds for this.

Thanks

... I realise you said the others were named on the account but trying to understand what that means in practice.

Adding other side here, both my 2 have done what your DS suggests and it’s worked fine. One finished, one end year 2. Second one did ensure all gas/electricity paid monthly based on use as prices so high. There are lots of things to negotiate between housemates. Even if you split bills via company there still has to be negotiation on when/if to put heating on, whether a TV licence is needed, how much cleaning to do to get deposit back at end. I do think all this is part of growing up. Some will end up in shared houses in first jobs.
I would let your DS and housemates resolve after offering some advice.

A few tips.

1. Sort out rooms on the basis of who likes a warm room and who prefers somewhere cooler. North facing rooms, larger rooms or back extensions tend to need more heating.
2. In her second year DD was in a house of four. She knew two and one was a friend of a friend. DD had set up all the accounts so her name was on all the bills. (I had agreed to underwrite and it helped her credit record, indeed meant a lower internet quote the following year. I also helped as this was her first time doing admin in finding the cheapest supplier, etc, which saved an awful lot.) The friend was very casual about money, so eventually DD stopped chasing him, and instead asked the others to. They were shocked that he had betrayed her trust and as it was less personal were far more effective.
3. Go through the inventory carefully. Student leases often start in the same week so professional cleaning can be minimal. Test the shower, boiler, washing machine etc and itemise everything. Blutack marks on walls, signs of condensation, dirty filter in cooker hood, dirty detergent holder in washing machine, loose drawers and doors, windows that don’t open or which have not been cleaned. If students do this and leave the flat in a similar or better state the agent cannot take money off their deposits. (And if they try the students should say they want to go to arbitration. Many letting agents seem to see deposit deductions as an extra earner, but faced with a long initial list of defects won’t bother.) Then highlight genuine heath and safety issues only. The price should reflect the condition of the property, so don’t expect the landlord to rectify non essentials, but things need to be safe. Perhaps ask if the landlord will consider a couple of the nice to haves but don’t be too demanding. An ongoing good relationship is important.
4. Get your student DC to read the contract, and their obligations. Equally read (someone like Shelter should have it) the list of landlord obligations. The student should receive a Right to rent leaflet, a current gas safe cert, and EiCR, a copy of the HMO registration (assuming the property needs one - the Council website will have local requirements) working heat and smoke alarms (heat in the kitchen, smoke in the corridors.) a carbon monoxide alarm in the same room as the boiler (do not put in the cupboard!). The gas cert and the alarms are import. If the student does not receive the leaflets and copies of registrations keep quiet. The student will have the upper hand in any dispute. In DDs second flat the amateur landlord failed to tackle very worn carpet on the stairs, and the fact that the fire alarm did not work even though they asked (if need be buy your own portable alarm) did not have an HMO registration and give them the right to rent leaflets, so DD would have won any dispute.
5. Landlord references are important. DD graduated this summer and the rental market where she will be working is very tight. They were looking for over a month. Luckily she had a good relationship with all three of her previous landlords so no problem with references. One way she did this was by setting aside two days at the end of the tenancy to clean and inviting her fellow tenants to either join her or to vacate a couple of days early. It ended up with two girls and two mums, but the flat was clean and the landlord stepped in to tell the letting agent to return their full deposit.
6. Go on the Council website and register everyone on the lease as council tax exempt. Do this quickly. Bristol in particular can be vicious and start taking people to court for payment if they do not register within a couple of months.
7. On internet, order it early, as it can take a month or so. It is worth asking who current utility and internet suppliers are and the current phone number. You may need landlord permission if you want to install cable. Virgin offer annual contracts but some of the others expect 18 months. NowTV! etc can be cheap, but set ground rules. It can be both very easy and very expensive to buy add ones like films and sports events.) Decide whether you want a TV license, and if you don’t, don’t watch terrestrial TV. We gave DD our second log in for Virgin/Sky Sport which she had on her laptop. One of the others had a projector.
8. Do “return to sender” on the pile of mail that inevitably accumulates in rental properties. Eventually it will stop, and help prevent you being linked in any way with any bad debt. (And when you leave, leave behind some sticky labels with your new address on, in the hope the new person will stick them in the post box.)
9. Once you have registered as council tax exempt, order some visitor parking permits. Really useful for visiting family, but will also put you in the good books of the emergency plumber.

There are always a lot of threads on how much to give a student to live on. A lot can be done to help a student child spend less. Learning how to sort out admin and ensuring you are not overcharged can reduce expenditure a lot. (Lots of other areas as well. Compare coach and rail costs with rail or coach card, a student cookery course or practice in preparing a weeks worth of menus, etc.)

Thanks @Needmoresleep . In your DD's case did they each pay rent separately or in a single payment? My son's agent is insisting on a single payment which means one person has to be "rent collector" in addition to needing volunteers for each of the bills.

Chikchik that sounds unusual. My overdetailed approach is because I am also a landlord with a couple of houses normally occupied by sharers as well as flats which often rent to professional singles from overseas. I am used to either helping people get started or being clear about expectations.

My sharers normally pay the agent individually. The tenants are joint and severally liable, so the agent will normally fire off a series of warning letters if any of the rent is overdue, giving the tenants a chance to put early pressure on their slow paying companion. It does not happen often, but things may change with the new legislation proposals. (It looks like the government accept that student rentals need to be exempted for a variety of reasons to avoid an impact on property supply.)

So it works out at more or less the same. If someone does not pay, the others have to. The landlord/letting agent is just passing the responsibility of checking the money is paid to the tenants at an earlier point. Since rent is probably monthly and loan is paid termly there might be advantage in paying the money over somewhere safe (cue a new conversation about suitable bank accounts) at the start of each term.

If someone needs to take it on it is worth noting that students aiming for a professional registration like doctor or lawyer or, say a career in banking or the police, cannot afford to have a CCJ. So hopefully will be trustworthy. A friend, who runs her own hedge fund, also factored in the “low hanging fruit”. If there were problems with payments and the landlord/agent were looking to guarantors, they would go for her first as she both could afford to pay up and could not afford to have any black mark against her financial record. A couple of her sons flatmates were from overseas so had problems with guarantors, so she just guaranteed the lot, as in practice it made no difference.

To add to my earlier tips. Get your DC to ask the others to provide parent contact details for use in an emergency. (Well worth doing anyway. We know a student who was hospitalised with meningitis and another who fell out of a window and broke her back, as well as a couple of stories of students who withdrew completely when having a mental health crisis.) Put the list up in the kitchen, then have your DC photo it. If there are problems with landlords or payments, parents may well need to speak to each other, especially if one of the students is trying to hide their financial problems.

@Needmoresleep how important is it for the landlord to have insurance?

I'm asking because my son's rental agreement has a clause which says they musn't do anything that violates the landlord's insurance. We asked the agent for the insurance document a while ago but they haven't produced it yet.

It's an ex-social housing property so the freeholder is the local authority - the agent suggested we contact them for their insurance policy but I haven't yet had a response from there either.

The lease was bought by an individual with a Nationwide mortgage in 2016. Their name and a second address for them is on the property register so, assuming it was a buy-to-let mortgage, would I be right in thinking the mortgage provider would have insisted on insurance?

I'm thinking thatbif there is no insurance, then the agent should remove the clause, but if there is insurance then we need to see it.

If there is no insurance, is that a heightened risk for the tenants?

Landlord insurance is very common, and often covers things like legal costs should the landlord need to evict, or chase missing rent, as well as damage to the property or contents.

As shown on those bad landlord, bad tenant programmes, a bad tenant can be really expensive.

In my experience it isn't required by btl mortgage companies and I do not buy it. (I rely on vetting tenants, and the fact I let to professionals.)

For flats the freeholder will hold the buildings insurance. This is different and covers structural stuff like sorting out roof leaks.

Because so many landlords do have insurance I suspect the clause has crept into the agents standard lease. Obviously the landlord won't want the tenant to do anything that might invalidate his insurance. Personally, with long experience of letting agents and their lack of interest in anything other than their commission, I would not worry too much. If they wont take it out, perhaps a seperate letter referring to the clause, saying you would like a copy of the insurance policy. And until you have seen it you cannot be bound by restrictions within that policy that might be in addition to restrictions already within the lease. But then I am not a lawyer.