In some rented properties — particularly HMOs, student accommodation, and serviced apartments — the landlord acts as the energy provider. This is called a landlord energy resale or sub-metering arrangement. Tenants in these situations have strong legal protections against overcharging. This guide explains how the Maximum Resale Price works and what to do if you suspect you are paying too much.
For the full overview of renter energy rights, see Renters’ Energy Rights.
How landlord sub-metering works
In a standard tenancy, you are a direct customer of the energy supplier — your name is on the account, and the supplier charges you directly at regulated price cap rates.
In a sub-metering arrangement:
- The landlord has one main meter (the ‘supply meter’) connected to the grid
- Individual sub-meters measure each tenant’s consumption
- The landlord pays the energy supplier for the total consumption
- The landlord invoices each tenant separately for their share
The landlord is acting as a re-seller of energy. This is legal, but Ofgem’s Maximum Resale Price rules apply immediately.
The Maximum Resale Price rule
Under the Gas Act 1986 and Electricity Act 1989, any person who resells energy to a domestic customer cannot charge more than the Maximum Resale Price (MRP).
The MRP is set at the unit rates and standing charges under the current Ofgem default tariff price cap — the same rates that directly supplied households pay. This means:
- A landlord cannot charge you more per kWh than the price cap rate
- A landlord cannot charge more per day in standing charges than the price cap standing charge
- A landlord cannot add any administration fee, handling fee, or profit margin on top of the MRP
Current (April 2026) Ofgem price cap unit rates:
- Electricity: approximately 24.50p per kWh
- Gas: approximately 6.24p per kWh
- Electricity standing charge: approximately 61p/day
- Gas standing charge: approximately 31p/day
(Check ofgem.gov.uk for the current quarter’s exact rates)
If you are being charged above these rates in a sub-metering arrangement, your landlord is breaking the law.
Common overcharging scenarios
Flat energy charge included in rent
Some tenancies include a fixed energy fee as part of the rent — for example, “bills included at £100/month” without any metering. This is not illegal, but:
- If your actual consumption would cost less than £100/month at MRP rates, you are effectively overpaying
- If the landlord cannot show what the £100 is based on (and cannot provide meter readings), this arrangement is difficult to enforce but arguably problematic if it regularly exceeds MRP
Prefer tenancies where energy is separately metered and billed at MRP rates.
Non-domestic tariffs applied to tenants
Some landlords supply properties on a commercial or non-domestic energy tariff (which may be higher or lower than the domestic price cap depending on market conditions). The MRP still applies — tenants must be charged no more than the domestic price cap rate, regardless of what the landlord pays.
Charges including landlord losses
Landlords sometimes claim they need to charge above MRP to cover their own standing charges on the main meter, admin costs, or losses. These additional charges are not permitted under MRP rules. The landlord must absorb any costs above the tenant’s MRP-calculated share.
How to calculate your correct maximum charge
- Take the current Ofgem price cap electricity unit rate (e.g. 24.50p/kWh)
- Multiply by your sub-meter kWh reading for the period
- Add: standing charge × number of days
- Total = maximum you can lawfully be charged
Example:
- Electricity used: 200 kWh
- Rate: 24.50p/kWh = £49.00
- Standing charge: 61p/day × 30 days = £18.30
- Maximum lawful charge: £67.30
If your landlord has charged more, they owe you a refund.
What to do if you are overcharged
- Document everything: Keep all energy invoices your landlord has sent and note the dates and amounts
- Calculate the overcharge: Compare against MRP rates for each period
- Write to your landlord: Request a refund of the overcharged amount, citing the Maximum Resale Price rules under the Gas Act 1986 and Electricity Act 1989
- If refused: Report to Trading Standards via the Citizens Advice consumer helpline (0808 223 1133). Trading Standards can prosecute landlords who breach the MRP
- Small claims court: You can also claim overpayments back through the County Court small claims track (claims up to £10,000 in England and Wales) without needing a solicitor
Communal heating in blocks of flats
Some purpose-built blocks use district heating or communal heat networks rather than individual gas boilers. From April 2025, communal heat networks are regulated by Ofgem — operators must register, follow consumer protection rules, and have a published heat supply agreement. The regulation of heat networks is being phased in; check ofgem.gov.uk for the current status.