Moving your business to new premises is an exciting milestone, but it comes with several administrative responsibilities. One crucial aspect that often gets overlooked is managing your business energy supply through a Change of Tenancy (CoT) or Change of Ownership process. Understanding this procedure can help you avoid unexpected bills, service disruptions, and potential disputes with your energy supplier.
What is Change of Tenancy or Ownership?
A Change of Tenancy, also known as Change of Occupier (CoO), refers to the formal process of notifying your energy supplier when your business moves into or out of premises. This can occur due to various circumstances including property sales, business expansion, relocation, or even bankruptcy. According to Ofgem, the UK’s energy regulator, businesses should inform their energy supplier of any change as soon as possible to avoid billing complications and unnecessary delays.
The process ensures a clear handover of responsibility for energy consumption and charges between the outgoing and incoming occupants, protecting both parties from being held liable for energy they didn’t consume.
Moving Out: What Do You Need to Do?
If you’re vacating business premises, it’s essential to contact your energy supplier promptly to close your account and receive a final bill. Delaying this notification could result in your business being charged for energy consumed by subsequent occupants.
Essential Information Required When Moving Out:
- Move-out date: The exact date you’re vacating the premises
- Final meter reading: Take a manual reading on your last day of occupancy, even if your supplier receives automatic readings
- Supporting documentation: Lease surrender documents, sale purchase agreements, letters from your solicitor, or asset transfer documents
- Forwarding billing address: Where you want your final bill and correspondence sent
- Keyholder details: Information about who will have access to the property after you leave
By providing complete and accurate information, you can typically expect your supplier to process the change within 10 working days, though they may occasionally request additional documentation to complete the process.
Moving In: Setting Up Your Energy Supply
When moving into new premises, you need to act quickly to establish your energy supply under your business name. While energy suppliers are legally obligated to continue supplying energy even after the previous tenant has left, failing to set up a proper contract could leave you paying expensive “out of contract” rates that can significantly impact your business expenses.
Essential Information Required When Moving In:
- Move-in date: When you take possession of the premises
- Opening meter reading: Record the meter reading on your first day
- Proof of occupancy: Lease agreement, sale purchase documents, letter from your solicitor, or asset transfer documentation
- Business contact details: Your company information and contact preferences
Whether you’re staying with the existing supplier or switching to a new one, notifying the current energy supplier immediately is crucial. This prevents you from being held liable for the previous tenant’s charges and allows you to negotiate competitive rates or explore switching options.
Ofgem’s Guidance on Change of Tenancy
Ofgem provides clear guidance for businesses undergoing a change of tenancy. If you’re staying with the current supplier, you should notify them directly and provide evidence of occupancy. The supplier must review your documents within 10 working days and either confirm the change or request additional information.
If you’re planning to switch suppliers when moving to new premises, you should notify both the current and new supplier about the change. The new supplier will initiate the switching process, which the current supplier should accept if they agree a genuine change of occupier has occurred.
Should you encounter delays or disagreements with your supplier regarding the change of tenancy, Ofgem recommends first contacting the energy supplier through their complaints process. If this doesn’t resolve the issue, you can escalate your case to the Energy Ombudsman or seek assistance from Citizens Advice.
The Energy Ombudsman’s Position
The Energy Ombudsman provides a free and impartial service to resolve disputes between consumers and energy suppliers. While they handle various energy-related complaints, they take change of tenancy cases seriously, particularly when suppliers fail to process legitimate requests within reasonable timeframes or when customers are held responsible for energy charges they shouldn’t bear.
The Ombudsman expects suppliers to process change of tenancy requests efficiently when proper documentation is provided. They can investigate cases where suppliers have unreasonably delayed processing, refused valid change of tenancy requests, or incorrectly billed customers for periods they didn’t occupy premises.
When It’s NOT Considered a Change of Tenancy or Ownership
Understanding what doesn’t qualify as a change of tenancy is equally important. Several scenarios might seem like ownership changes but don’t actually constitute a change of occupier:
1. Director or Shareholder Changes When a new director is appointed to the same limited company, or when shares change hands within the same business entity, this is not a change of tenancy. The legal entity occupying the premises remains the same, so no change of occupier process is required. The energy account stays with the company, not the individuals running it.
2. Business Name Changes If your company undergoes a rebrand or legal name change but maintains the same company registration number and legal entity, this doesn’t constitute a change of tenancy. You simply need to inform your supplier of the name change for billing purposes.
3. Partnership Restructuring When partners join or leave a partnership, but the partnership itself continues operating from the same premises under a similar structure, this typically doesn’t trigger a change of tenancy process. However, if the partnership is dissolved and reformed as an entirely new entity, this would require a change of occupier.
4. Lease Assignment Within Corporate Groups When a property lease is transferred between parent companies, subsidiaries, or affiliated entities within the same corporate group, and the actual occupation doesn’t materially change, this may not be treated as a full change of tenancy by some suppliers.
5. Business Structure Changes Converting from a sole trader to a limited company, or from one business structure to another, where the individual owner remains the same and continues occupying the same premises, may be treated as an account amendment rather than a full change of tenancy, depending on your supplier’s policies.
Best Practices for a Smooth Transition
To ensure your change of tenancy proceeds without complications, always take manual meter readings on both your last day at old premises and first day at new premises. Keep copies of all correspondence with your supplier, and don’t hesitate to follow up if you don’t receive confirmation within the expected 10 working days.
Remember that informing your supplier immediately isn’t just about avoiding charges—it’s also an opportunity to negotiate competitive rates for your new premises or explore switching to a more cost-effective or environmentally friendly supplier.
Conclusion
Managing a change of tenancy or ownership for your business energy supply doesn’t need to be complicated. By understanding the process, gathering the required documentation, and acting promptly to notify your supplier, you can ensure a seamless transition. If issues arise, remember that Ofgem guidance and the Energy Ombudsman are there to support you. Taking these proactive steps protects your business from unexpected charges and helps you start your new chapter on the right foot.
Do Follow For More-
