City Tenants: Rebate of Water Charges

Below is a letter sent to impacted City of London residents regarding a water charge rebate:

Until March 2019, the City of London Corporation had an agreement with Thames Water that it would collect water and wastewater charges from its tenants on Thames Water’s behalf. Thames Water calculated the charges, and the City Corporation was responsible for collecting the payments. Tenants paid the water charges as part of their weekly rent. In return for carrying out billing and collection, the City Corporation was given a ‘commission’ / discount on the cost of the water. Many other council landlords had the same type of arrangement.
Following successful legal challenges against other council landlords in relation to their arrangements, the City of London Corporation has decided to refund tenants part of the charges they paid for water and wastewater services between 2005 and 2019. Case by case consideration will be given to any validated requests for refunds between 2001 – 2005.
We have enclosed a factsheet with full details of the issue and how we plan to repay the amounts due to tenants.
As a current tenant, you do not need to contact us to request the 2005 – 2019 refund. We will write to you with details of the amount you are due to receive. This amount will be credited to your rent account in late March 2022.
For more information, please refer to the enclosed factsheet, or visit www.cityoflondon.gov.uk/waterrefund

Frequently Asked Questions:

What is a water charge rebate?
Along with many other local authority landlords, the City of London Corporation had a longstanding agreement with Thames Water where we collected water charges along with your weekly rent. This meant that you did not have to deal directly with Thames Water, as we managed the billing and collection of payments.
Recent court cases involving other local authorities challenged this kind of arrangement and the administration costs that councils received from Thames Water for collecting water charges on their behalf. The courts ruled that some councils had
acted as a ‘water reseller’ and had charged tenants a ‘commission’.
As a result of those rulings, a decision has been taken by the City of London Corporation to pay this money back to its tenants.

About the legal cases
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.
The court decided that councils with similar agreements were ‘water resellers’ and not ‘agents’. A water reseller is someone who receives a supply of water from the water company and sells it on to users. Where a landlord 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. However, as the court decided that councils acting in this way were water resellers, 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 giving back to eligible tenants.

Was I charged more for water because I paid through the City of London?
No. Tenants did not pay any more for their water than they would have paid had they been direct customers of Thames Water. The amount you were charged was calculated by Thames Water. The City Corporation received a discount on the bulk price of water supplied to its homes in recognition of it taking on responsibility for billing and collection of water charges. Tenants would not have been able to receive this discount had they paid Thames Water directly.

Who will get a rebate?
You will be entitled to a rebate if you were a tenant of the City of London Corporation between 1st April 2001 and 31st March 2019 and were charged for water services as part of your weekly rent.
Tenants who have held more than one tenancy with us will receive a refund in respect of each tenancy (if held between the dates above).

What about joint tenants?
Only one rebate will be given per tenancy, because only one water charge is made per property. The refund will be paid to the rent account and any credit refund which is requested will be paid to the person recorded as the Lead Tenant.

Why will I only get a refund if I was a tenant between 2005 and 2019?
Our agreement with Thames Water began in 1996. It was only when the Water Resale
Order came into effect in April 2001 that the rules about ‘water resellers’ changed. Our
agreement with Thames Water ended on 31st March 2019.
Neither the City Corporation nor Thames Water still hold information about water
charges paid by our tenants between 1st April 2001 and 31st March 2005. It has
therefore been decided to pay sums back to eligible tenants from 1st April 2005 to 31st
March 2019. We will also consider any claims for the period of 1st April 2001 to 31st March 2005
from current and former tenants.

How is the rebate worked out?
The calculation runs from the start of your tenancy (or 1 April 2005, if that’s later) up to 31st March 2019 (or the end of the tenancy, if that’s earlier). The amount to be rebated is 19.56% of the original charge. The law allows us to make
a charge of 1.5p per day for administration (£5.48 per year). We’ve added interest to the refunds up to the date of the payment. The law 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 is applied to your rent account.
Precise water charges vary a lot depending on the size of the property and other factors. Here is an example based on an annual water bill of £300:
£300 x 0.1956 = £58.68 (sub-total)
£58.68 (sub-total) minus £5.48 (annual administration charge) = £53.20 total refund for that year
Interest is then applied to the final amount. This calculation is carried out for each year of the tenancy (between 2005-2019). Interest is paid up to the date of the rebate (March 2022).

How can I get my rebate?
You do not need to contact us. We will write to you with details of the amount you will receive. We will automatically credit your rent account with the amount of the rebate. We will do this even if you have moved home during the rebate period but remain a
City Corporation tenant. The rebate will be posted to your rent account as a credit adjustment. If you have rent arrears, or other debts with the City Corporation, 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. Please be aware that refunds may take up to 30 days to process.

When will I get my rebate?
We will automatically credit your rent account with the amount of the rebate during the week commencing 28th March 2022.

What if I have rent arrears or other debts?
If you have rent arrears, any refund you are paid will be used to reduce your rent arrears first. If you owe other debts to us, for example court costs or rechargeable repairs, we will use the refund to pay towards those debts. Anything left over will be
credited to your rent account.

Can I leave the credit amount on my rent account to pay for future rent payments?
Yes, you can. You do not need to claim the refund. The adjustment will be made to your rent account and can be used to make future rent payments.

I pay my rent by Direct Debit, will the refund affect that?
If the refund leaves your account in credit, your Direct Debit will be automatically adjusted to take account of it and ensure you do not overpay.

Does this affect any benefits I receive?
The rebate will appear as a credit on your rent account, this should not affect your benefits in any way. If you request a refund of a credit on your rent account, this will be considered as part of your savings. If you want more advice on this, please contact
the agency which assesses the benefit you currently receive.

What about former tenants of the City of London?
Former tenants who held a City of London tenancy between 1st April 2005 and 31st March 2019 are entitled to a rebate and will need to contact us to make a claim. The easiest way is to make a claim via waterclaim@cityoflondon.gov.uk.
City of London tenants who exercised their Right to Buy can also claim a rebate for the period of their tenancy if it falls within the eligible period. Next of kin or personal representatives of deceased former tenants may also claim a rebate on behalf of the former tenant’s estate. In all cases, you will be asked to provide proof of the tenancy (including the tenancy reference number) and identification. Personal representatives will also be required to show proof of their right to act on the former tenant’s behalf (e.g., administration letters or other official proof).
Any debts owed to the City of London, for example rent arrears or court costs, will be paid off before any remaining rebate is issued.

I am concerned about the cost of my water bill
You should contact Thames Water for advice, as you may be eligible for a discount on your water bill if you are on a low income. Thames Water has a scheme called WaterHelp which is open to households with an income below £19,747 per year. If you
are eligible, you may receive a discount of up to 50% on your water bill.
Please visit www.thameswater.co.uk/help/ for more information or contact Thames Water’s customer service line on 0800 316 9800 for advice.

I am concerned about other debt or money problems
You can contact City Advice for free, confidential advice on a range of topics including debt and financial problems. This service is available to all City of London tenants regardless of location.
Tel: 020 7392 2919
Email: cityadvice@toynbeehall.org.uk
Website: www.toynbeehall.org.uk/cityadvice

How to contact us
Please note that current tenants do not need to contact us at this time – we will write to you with details of the amount due to you and will credit this to your rent account.
E-mail: waterclaim@cityoflondon.gov.uk
Telephone: 020 7606 3030
Letter: Rents Team, Barbican Estate Office, 3 Lauderdale Place, London EC2Y 8EN
Website: www.cityoflondon.gov.uk/waterrefund

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