Updated 22 July 2026
Short Answer – Deemed supply contracts are deliberately expensive. Don’t skip meter readings. Like skipping leg day at the gym, this is going to backfire – badly. If you use electricity, water or gas without telling the supplier you’re using it, they’ll impose punitive supply contracts on you – implied statutory contracts. These implied agreements are designed to deter people from not paying suppliers by hiding changes of owner and user (since suppliers have a duty to supply which they cannot contract out of). Suppliers of course take unfair advantage of mistakes and even basic ownership changes which are fully disclosed, as the rates are so profitable and advantageous to the suppler.
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What is a A ‘Deemed Supply Contract’?
This is a contract which the energy company can imply and charge you for, if your do not send them meter readings when you take over possession of a building. These statutory contracts can be many times mote expensive than ordinary supply contracts. The mischief this law is designed to protect, is where consumers fail to tell the energy company they’re using the supply in order to avoid paying the bill. It incentivises users to pay their bills properly and on time. However the suppliers like to imply them where ever possible, as they’re very profitable.
Why this matters right now
It is important to avoid ending up with a ‘deemed supply contract‘ if you’re changing tenants or occupancy of a building, residential or commercial. The energy company will not immediately disconnect your gas, water or electricity supply, but they may double your bill for an ‘implied supply contract’ or ‘deemed supply contract’ – a statutory contract in other words.
Meter readings tenant leaving ?
If you forget (or ‘forget’) to take meter readings when your tenant leaves your rental property, several issues can arise with energy (gas and electricity) supplies, potentially leading to higher costs under a “Deemed Supply Contract”.
This is a common concern for landlords during the void period between tenancies. Here’s what typically happens and how to handle it.
When a tenant vacates, they remain responsible for utility bills up to their move-out date, assuming the tenancy agreement states tenants handle utilities and the account is in their name. They should take final meter readings on departure day, submit them to their supplier, and request account closure. This ensures accurate billing based on actual usage, and any final bill goes to the tenant.
Void period energy bills
If no final reading is provided (by the tenant or you as landlord), the supplier often uses an estimated reading based on historical data or the tenant’s Estimated Annual Consumption (EAC). This can lead to inaccuracies: an overestimate might result in the tenant disputing or underpaying, while an underestimate could leave unpaid usage rolling over. Suppliers will chase the tenant for any outstanding amounts, not you, provided bills were in the tenant’s name.
The bigger risk for landlords comes post-vacancy. Once the tenant’s account closes (or lapses due to non-payment/no notification), the property becomes unoccupied with no active contract. UK law (via the Electricity Act 1989 and equivalent gas provisions) creates a deemed supply contract automatically. The supplier continues providing energy (for standing charges and any minimal usage, like pilot lights or security systems), but deems a contract with the owner (you, the landlord) if the premises are unoccupied.
Deemed contracts act as a safety net for continuity but are intentionally expensive. They lack negotiation, reflect supplier risk (uncertain usage, potential credit issues), and often carry premiums.
Domestic Properties
For domestic properties (most residential rentals), deemed rates generally align with or fall under the Ofgem energy price cap for standard variable/default tariffs. As of April–June 2026, the cap sets:
- Electricity: ~24.67p/kWh unit rate
- Gas: ~5.74p/kWh
- Standing charges: ~57p/day electricity, ~29p/day gas (Direct Debit, including VAT)
You won’t face extreme hikes here compared to other default options, but you still pay standing charges daily during voids, plus any usage.
Commercial Properties
Recent 2026 examples show deemed electricity at 38–50p/kWh versus ~22–25p/kWh on fixed deals—up to 80% or more in some cases—with elevated standing charges.
Deemed supply contract charges for commercial properties are significantly higher and punitive. The only winners are the energy and water companies if you fail to take readings and hope that they will not notice!
Forgetting readings exacerbates problems:
- Without a closing reading from the tenant, the supplier might not close the account promptly, leading to continued billing in the tenant’s name (with you potentially chasing them later).
- If you don’t act quickly (notify the supplier of vacancy, provide a new reading, and set up your own account), the deemed contract kicks in sooner, with charges backdated to when the prior contract ended.
- Any post-vacancy usage (e.g., from showings, maintenance, or leaks) gets billed at deemed rates, potentially inflating void costs.
- Disputes over estimates can delay resolution, and suppliers may disconnect if unpaid (though rare for standing charges alone).
To minimize impact:
- Always take (or arrange) meter readings on move-out day—photograph them with timestamps for proof.
- Ask the tenant to submit finals and close their account; follow up if needed.
- Immediately notify the supplier of the vacancy, provide your own opening reading as landlord, and request transfer to your name (or set up a new contract).
- Consider a cheap fixed tariff during voids to avoid deemed premiums—deemed contracts have no exit fees, so switching is easy.
- Document everything to protect against disputes.
In short, forgetting meter readings doesn’t make you liable for the tenant’s prior usage or debts, but it can trigger or prolong a deemed contract in your name, leading to unnecessary standing charges and higher rates during empty periods.
Prompt action—readings, notifications, and switching—keeps costs down.
For water/sewerage, similar principles apply in competitive markets (e.g., non-household England), but domestic water remains statutory without true deemed contracts.
Check your supplier’s terms or Ofgem/Ofwat guidance for specifics, as rates vary.
David Buchanan is a property litigator, conveyancer and private client lawyer with 20 years experience (or more!) in the field. He is currently a consultant solicitor.