Water charges rebate

Water charges rebate

We had a longstanding agreement with Thames Water where we collected water charges along with your rent. This meant that you did not have to deal directly with Thames Water as we managed the billing and collection of payments.

A recent court case involving another local authority challenged this arrangement and the administration costs that they received from Thames Water for collecting water charges on their behalf. The court ruled that they had acted as a 'water reseller' and had charged tenants a ‘commission’. As a result of that ruling a decision has been taken by this Council to pay this money back.

Click on the drop downs below to find out more about the water charge rebate.

About the court case

 

We considered ourselves as an 'agent' working on behalf of Thames Water. Each bill was calculated by Thames Water and we had no say in the amount of money charged. We simply passed the bill on to tenants and collected payment along with the rent. We also received what we considered to be an administration charge. However, the court decided this was a commission.

The court decided that we (and other councils) were a 'water reseller' and not an 'agent'. A water reseller is someone who receives a supply of water from the water company and sells it on to users.  Where a landlord (like Kensington and Chelsea Council) is acting as a water reseller, there are laws to stop landlords overcharging tenants.

We did not knowingly overcharge tenants, because we thought we were acting as an agent and not a water reseller. Thames Water calculated each bill and we were only responsible for sending it out and collecting payment.

However, as the court decided that we (and other councils) were a water reseller, this means we mistakenly overcharged tenants by the amount of the commission Thames Water paid us (which we had considered to be an administration charge). It is this commission, plus interest, that we will be crediting to your rent account. 

Can I get a rebate?

 

You will be entitled to a rebate if you were a Kensington and Chelsea Council tenant between April 2006 and August 2017 and were charged for water by the Council. April 2006 is when we entered into the agreement with Thames Water and August 2017 is when we ended the agreement.

If you were in temporary accommodation

You are also entitled to a rebate if your accommodation was provided through Kensington and Chelsea Council and your annual rent included a separate amount for water charges.

Joint tenants

Only one rebate will be given because only one water charge was made for each property. 

How is the rebate worked out?

 

The amount to be credited has been calculated using a formula based upon Local Government Association (LGA) guidance. The rebates will cover the period between April 2006 (or the start of a tenancy if that is later) to 3rd August 2017 (or the end of a tenancy if that’s earlier).

To help explain how the rebate is calculated we will use an example where the water charges paid by a tenant in one year was £300. 

The starting point is the weekly water charge for an individual dwelling in a particular year; in this example £300. 

The commission and voids allowances are then applied to this charge. For Kensington and Chelsea, the commission percentage is 7 per cent and the voids allowance is 2 per cent. The voids allowance is not applied to the commission element, hence the overall amount retained for commission and voids equalled 8.86 per cent of the water charge i.e. £26.58 in this example.

The Council was entitled, under the Water Resale Order, to charge 1.5p per day or £5.48 per year.

The rebate due for the year in this example is then the difference between the amount retained for commission and voids and the allowable admin fee - i.e. £26.58 - £5.48 = £21.10.

In addition, interest is added to the amount calculated above. This is in recognition of the fact that this money has been held by the Council for a number of years. 

We have added interest in accordance with the Water Resale Order. This provides that simple interest, calculated at twice the average base rate of the Bank of England, is applied for the period from when the charge was made to when the rebate was applied to your rent account.

How can I get my rebate?

 

We will automatically credit current tenants’ rent accounts with the amount of their rebate. We will do this even if you have moved home (for example through Mutual Exchange) during the rebate period but remain a Kensington and Chelsea Council tenant.

The rebate will be posted to your rent account as a credit adjustment. If you have rent arrears, the credit will be used to repay those first. If your account is clear or in credit you may wish to claim the amount back by submitting a refund claim. For more information about how to contact us or how to claim a refund, please refer to the “Enquiries” section below.

Former tenants

The value of the refund due to former tenants will be calculated in the same way as for current tenants which is described above. 

Due to data protection requirements we do not hold current addresses for most former tenants, so we are unable to contact you directly. However, if you were a Kensington and Chelsea Council tenant during the period April 2006 to 3rd August 2017 and paid water rates with your rent you may be eligible for a refund of the commission we received. If you think you are eligible for a refund you will need to claim your rebate by submitting a refund claim. You can do this by calling us on 0800 137 111or by emailing us on HM-Rentincome2@rbkc.gov.uk

In order to process claims from former tenants you may be contacted and asked to provide a proof of tenancy (rent reference number) and proof of identity. This is to enable us to protect against fraudulent claims. Once we have received your completed form we will process your refund as quickly as possible but please note that due to the volume of requests that we receive, this may take a few weeks.

Any arrears still outstanding relating to your former rent account will be deducted from any refund due.

 

How this affects your benefits

The rebate will appear as credit on your rent accounts. This should not affect your Housing Benefit in any way. 

The rebate will be considered when assessing your total savings for Housing Benefit purposes, only if you claim it as a refund.

When will I receive my rebate?

 

We will automatically credit current tenants’ rent accounts with the amount of their rebate during the week commencing 10 May 2021. However, additional checks are required for rebates relating to any previous tenancy accounts existing residents may have with us. We aim to credit these accounts in July.

Enquiries 

 

Last updated: 27 October 2021