The most common source of confusion around water rates in rental properties is what happens during a void period. While the tenant is in occupation, the tenant is the occupier and the water company's primary debtor for water charges. As soon as the tenancy ends and the property is empty, the landlord becomes the occupier — and therefore becomes liable for any standing charges, minimum consumption charges, or other charges that accrue during the void. Landlords who fail to notify the water company of tenant departures can find themselves pursued for arrears that accumulated during the previous tenancy, even though those charges should have been the tenant's liability.
For HMO landlords, the position is typically that the landlord pays a single metered water bill for the property as a whole — since HMOs usually have a single water meter for the building — and recovers the cost from the tenants through an inclusive rent or a defined utility contribution. Landlords who pass water charges on to tenants in bills-included arrangements must comply with the Water Resale Order 2006, which prohibits making a profit on water resale and caps the resale price at cost plus a 15 per cent administration charge.
Water rates liability — tenant, landlord, void periods and s.144A
The legal framework for water rates liability in rental properties and the key situations where the landlord becomes liable:
- Primary liability — the occupier pays (WIA 1991 s.144): Under the Water Industry Act 1991 s.144, water charges are the liability of the occupier of the premises. In a residential tenancy: the tenant is the occupier during the tenancy period; the water company may bill the tenant directly (most English and Welsh water companies bill the occupier directly for the property); the landlord is not the primary debtor for water charges during a tenancy where the tenant is the occupier. However, the practical position is more nuanced: (a) some water companies maintain the account in the landlord's name and collect from the landlord, who then recovers from the tenant — this is especially common in areas where the water company does not maintain individual tenant accounts; (b) the water company has a right to recover unpaid water charges from the current occupier, meaning a new tenant can inherit arrears liability for their period of occupation even if the previous tenant ran up debts; (c) the landlord remains jointly liable with the occupier in some circumstances and can be pursued by the water company if the occupier defaults. Void periods: when the property is empty between tenancies, the landlord is the occupier (there is no other occupier) and is liable for all water charges during the void — including standing charges; minimum service charges; and any consumption attributable to the void period (e.g., from a dripping tap or minor leak). Landlords should notify the water company of each tenancy end date to ensure the account is transferred to the new tenant's name promptly and the landlord is not billed for consumption during the occupied period. s.144A WIA 1991 (landlord liability for unidentifiable occupier): section 144A of the WIA 1991 (inserted by the Water Act 2003) specifically addresses situations where the water company cannot identify or trace the occupier of a property — providing that the owner of the property (the landlord) is liable for water charges where the occupier cannot be found. This provision is particularly relevant for: (a) properties where the landlord has failed to notify the water company of the tenant's details; (b) short-term or informal lettings where the occupier's identity is not registered with the water company; (c) properties with high tenant turnover (e.g., HMOs; student lets) where the water company struggles to maintain accurate occupier records. Practical implication: landlords should maintain a clear record of each tenancy's start and end dates and notify the water company at each tenancy change — this protects against s.144A liability for former tenants' consumption
- Bills-included tenancies, HMO water billing and metered vs unmetered supply: Bills-included tenancies: many landlords offer tenancies where the rent is inclusive of water charges (along with electricity; gas; broadband; council tax). In bills-included arrangements, the landlord pays the water company and recovers the cost through the all-inclusive rent. The landlord must not make a profit on the water element — the Water Resale Order 2006 caps the resale price at the amount the landlord actually pays to the water company plus a maximum 15% administration charge. A landlord who charges tenants significantly more than the water company rate for water is in breach of the Water Resale Order 2006. HMO water billing: most HMOs have a single water meter for the whole building. The landlord receives one metered bill from the water company for the property. The landlord either: (a) includes the cost of water in the HMO rent (most common — simpler; avoids disputes about individual room consumption); or (b) charges water as a separate utility addition to the rent. In both cases, the 15% administration cap of the Water Resale Order 2006 applies to any recovery from tenants. HMO landlords should not install sub-meters in individual rooms and charge tenants at sub-metered rates without careful legal advice — the Water Resale Order 2006 applies to any resale regardless of metering. Metered vs unmetered supply: metered supply is based on actual consumption (smart meters or periodic reads); unmetered supply is historically billed on rateable value (now relatively uncommon — most new connections are metered). For void periods on an unmetered supply, the water charge continues to accrue on the rateable value basis regardless of whether the property is occupied. For metered properties, void period consumption should be minimal if the property is properly secured — but standing charges continue regardless. Contact: water company customer services to report tenancy changes; most water companies now have online portals for landlords to notify occupancy changes and update account holder details
Notifying water companies, Water Resale Order compliance and devolved positions
Practical steps for managing water rates across a rental portfolio — and the position in Scotland, Wales and Northern Ireland:
- Notifying water companies and practical management: Best practice for landlords at each tenancy change: (a) at tenancy start: notify the relevant water company of the new tenant's name; date of occupation; and address — most companies have online landlord portals or dedicated landlord lines; provide the meter reading (if metered) at the start of the tenancy as the opening meter read for the tenant's billing period; (b) at tenancy end: notify the water company of the tenant's departure date and (if known) the tenant's forwarding address; provide the closing meter reading; ensure the account is moved from the tenant's name back to the landlord's name for the void period; (c) contact your regional water company: England — regional companies include Thames Water; Severn Trent; Anglian Water; United Utilities; Yorkshire Water; Southern Water; South West Water; Bristol Water; Wessex Water; Affinity Water; Portsmouth Water; South East Water; (d) keep records: retain copies of all notifications to the water company (dates; meter readings; tenant details) as evidence in case of any disputed billing. Water Resale Order 2006 — compliance: the Order applies to all landlords who supply water or arrange for water to be supplied to tenants as part of a tenancy arrangement. Key rules: (i) maximum resale price = amount paid to the water company ÷ number of tenants (or apportionment) + 15% administration charge; (ii) the landlord must not charge separately for 'standing charges' above the actual charge from the water company; (iii) the administration charge of 15% is a maximum — the landlord can charge less; (iv) the Order applies to all metered and unmetered supplies; (v) a tenant who believes they have been overcharged for water can make a complaint to Ofwat or seek a refund through the county court. Practical point: for bills-included HMO tenancies, the simplest approach is to recover the exact water cost divided equally between tenants — this avoids any risk of breaching the 15% cap
- Scotland, Wales and Northern Ireland: Scotland: Scottish Water is the publicly-owned water and sewerage provider for all of Scotland — there are no private water companies in Scotland. Scottish Water charges are billed through local authority council tax bills (the water and sewerage service charge is collected as part of the council tax demand). In rental properties: (a) where the tenant pays council tax (the normal position for a single-household tenancy), the water and sewerage element is included in the council tax bill and the tenant pays it directly; (b) where the landlord pays council tax (HMO — where the council tax exemption applies to HMOs in Scotland as in England), the landlord pays the water and sewerage element as part of the council tax; (c) void periods: the landlord pays the council tax (including the water element) during void periods; the Council Tax Empty Property Exemption may apply (up to 6 months in some Scottish councils) — but the water element continues to accrue regardless; (d) Scottish Water has no separate domestic metering scheme equivalent to English metered supplies — most Scottish residential properties are unmetered (billed on rateable value via council tax). Wales: Dwr Cymru (Welsh Water) is the principal water company for most of Wales. English WIA 1991 principles apply in Wales — the occupier is primarily liable; the landlord is liable during voids; the Water Resale Order 2006 applies. Hafren Dyfrdwy covers parts of north-east Wales (formerly Severn Trent Water Wales). Northern Ireland: NI Water (Northern Ireland Water Limited — publicly owned) is the sole water and sewerage provider for Northern Ireland. A key difference in NI: domestic water and sewerage charges are not separately billed to occupiers in Northern Ireland — domestic water supply is currently subsidised and not subject to a separate occupier charge. NI domestic rates (payable to Land and Property Services NI) cover part of water costs. Private landlords in NI should check with NI Water and Land and Property Services for the current position on domestic water charging in NI as government policy may change
Frequently asked questions
Am I responsible for water rates during a void period in my rental property?+
Yes. Under the Water Industry Act 1991, the occupier of a property is primarily liable for water charges. During a void period when the property is empty and there is no tenant, the landlord is the occupier and becomes liable for all water charges — including standing charges and any consumption. Notify the water company of each tenancy end date so the account is transferred back to your name for the void period and there is no ambiguity about who owes what. Metered properties will have minimal consumption charges during a void if the property is properly secured and no appliances are running.
Can I include water rates in HMO rent and charge tenants?+
Yes — this is standard practice for HMO landlords. Most HMOs have a single water meter, so the landlord pays one bill and recovers the cost from tenants through inclusive rent. However, you must comply with the Water Resale Order 2006: the maximum amount you can charge tenants for water is the amount you actually pay to the water company plus a maximum 15% administration charge. You cannot make a profit on water resale. The simplest approach is to divide the actual water cost equally between tenants (plus up to 15% admin charge) — this avoids any regulatory risk.
What is the Water Resale Order 2006 and does it apply to me?+
The Water Resale Order 2006 applies to any landlord who supplies water (or sewerage services) to tenants as part of a tenancy arrangement — including bills-included tenancies, HMOs with shared meters, and serviced accommodation. The Order caps the resale price at: the actual amount paid to the water company + maximum 15% administration charge. Charging tenants more than this is a breach of the Order and can result in Ofwat complaints or county court claims for the overpaid amount. The 15% cap is a maximum — you can charge less but not more.
Who pays water rates in Scotland — the landlord or the tenant?+
In Scotland, water and sewerage charges are collected by local authorities as part of the council tax bill — there is no separate water bill from Scottish Water for domestic properties. Where the tenant pays council tax (which is the normal arrangement for single-household tenancies), the water and sewerage element is included in the council tax demand and the tenant pays. Where the landlord pays council tax (which applies to HMOs in Scotland), the landlord pays the water element as part of the council tax. During void periods, the landlord pays council tax (and therefore the water element) — some Scottish councils offer a council tax exemption for empty properties for up to 6 months, but the underlying water obligation continues.
- Utilities responsibility — gas, electricity, broadband and water in tenancies →
- Void periods — costs, insurance and reducing vacancy risk →
- HMO management regulations — amenity standards and landlord obligations →
- Council tax — landlord liability, exemptions and HMO council tax →
- HMO minimum room sizes — bedroom space standards 2026 →
- Bills-included tenancies — structuring utilities and compliance →