Change of Tenancy: Getting Energy and Water Right When You Move Premises
The day you take on a new site you are already buying energy, on rates you never agreed. Handling change of tenancy properly is worth more than most people expect.
Change of tenancy – Moving into new premises involves solicitors, surveyors, fit-out contractors and a hundred decisions. The utilities usually get dealt with in week three, by which point the meters have been running for a fortnight on rates nobody chose.
It is a small administrative job that costs real money when it is done late.
What a change of tenancy is
A change of tenancy, or COT, is the process of transferring responsibility for a utility supply from one occupier to another. It is not a switch and it is not a new connection. It is a change to who is liable at an existing meter.
It applies separately to electricity, gas and water, with different processes and different timescales for each. Doing one does not do the others.
Deemed rates start on day one
Take occupation without a contract in place and you are supplied under a deemed contract. The supplier sets the rates, and deemed rates sit well above anything you would negotiate. There is no notice period, so you can leave at any time, but every day you sit there costs more than it should.
This is the same mechanism as out of contract rates at the end of a term, arriving from the other direction.
The fix is straightforward and often skipped: agree a contract to start on your occupation date, before you occupy. Suppliers can do this. What they cannot do is backdate a negotiated rate to cover the fortnight you spent on deemed supply while nobody got round to calling.
On a modest office that might be a few hundred pounds. On an industrial unit with real load it is materially more.
Take the reads, and take them properly
The single most valuable thing you can do on the day is record the meter readings.
Photograph every meter, with the serial number legible in the same frame or in a second shot. Electricity, gas and water. Note the date and time. If the site has half-hourly metering the data will be there anyway, but the photograph settles arguments about non half-hourly and gas supplies that data alone will not.
Why it matters: without an agreed opening read, the supplier apportions consumption between you and the outgoing occupier using an estimate. Estimates rarely favour the incoming tenant, and disputing one six months later without evidence is a slow process with a poor success rate.
The outgoing occupier should do exactly the same for their closing read. If you are the one leaving, that photograph is what stops you being billed for the next tenant’s first quarter.
You are not liable for the previous occupier’s debt
This comes up constantly, usually as a threatening letter.
You are not responsible for energy consumed before you took occupation. What you may have to do is prove when you took occupation, which is why the paperwork matters. A signed lease, licence or completion statement showing the date, plus your opening reads, is normally enough to resolve it.
Where it gets messy is when the previous occupier left without notifying the supplier. The supplier keeps billing the last known account holder, the debt builds, and eventually collection activity lands at the property. Sorting that out is much easier with the evidence gathered on day one than reconstructed a year later.
Do not ignore letters addressed to “The Occupier”. Respond with the COT information and the reads, and keep a copy.
What the supplier needs from you
For each supply, expect to provide:
> The full site address, exactly as the supplier holds it
> The MPAN for electricity, MPRN for gas, SPID for water
> The date you took occupation
> Opening meter reads
> Company details, and often a credit check
> Evidence of occupation such as the lease or licence
The supply numbers are the usual bottleneck. If you cannot find them, they are on the previous occupier’s bills, on the meter paperwork, or obtainable from the relevant network operator. Ask the landlord or agent for them as part of the pre-let information rather than hunting afterwards.
One warning on billing addresses. For water in particular, the billing address should be the site address, not the managing agent’s, unless there is a specific arrangement in writing. Getting that wrong is a common source of invoices that never reach anyone.
Ofgem’s guidance on getting energy for your business covers your position as a new occupier.
Water works differently
Water in England is a retail market, so you have a water retailer separate from the regional wholesaler, and your supply is identified by a SPID rather than an MPAN or MPRN.
Change of tenancy on water tends to be slower and less automated than energy, and lead times matter. As a rule the transfer is lodged from the start of the month in which occupation changes, not before, and provisional dates are not accepted. It is also the utility most likely to keep billing the wrong party for months if nobody tells the retailer.
Read our guide to business water rates for how the charges themselves are built up.
A short checklist
Before you occupy: get MPAN, MPRN and SPID from the landlord or agent, and arrange contracts to start on your occupation date.
On the day: photograph every meter with serial numbers, and record the date.
Within the first week: notify each supplier and retailer of the COT with reads and evidence of occupation, and confirm the correct billing address.
Within the first month: check the opening invoices reflect the reads you supplied and the rates you agreed. That is a straightforward invoice validation exercise and it catches most errors while they are still easy to fix.
Chris Hurcombe is Managing Director of Catalyst Commercial Services, an independent business energy consultancy based in Birmingham. He works with UK businesses on energy procurement, contract management, and carbon strategy, and writes on energy markets, compliance, and the commercial implications of the UK's net zero transition.
LinkedIn Profile