Ask the expert

I have a holiday home in Cornwall, which our family uses about four times a year, for the remainder of the year I try to let it out to tourists. My landlord supplies me (and others in the resort) with electricity at a very high rate and refuses to negotiate. Have we any recourse in law as he claims we are running a business and business/business supplies are exempt from Ofgem regulstions.

Answered by our Expert: Melanie Burton, Legal Executive, Tozers LLP

Published December 2009 

The Ofgem regulations control the maximum resale price that anyone can charge when reselling gas and electricity. That price must be the same as the price charged by the utility company.

The regulations apply only in cases of domestic supply i.e. a landlord reselling electricity to a tenant and does also include gas and electricity resold for use in holiday accommodation.

Whether the regulations apply in this particular case depends upon whether the holiday home owner derives an income from the holiday accommodation, if that is the case it could be that the supply is business to business and therefore the rules do not apply.

The individual should also look at the terms of his lease or tenancy agreement to see what is says about the supply of electricity. It may be the case that there are specific terms contained within it that govern how the landlord bills for gas and electricity supply.

It is also worth noting that if the gas supply happens to be LPG, then the regulations do not apply and therefore the landlord is not restricted  on how much he can resell. Again it is worth checking the lease or tenancy on this point.

If tourism businesses would like to discuss this particular issue in more detail please contact Tozers LLP
Tel: 01392 207020