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L&Q to refund thousands of residents caught up in water bill saga
L&Q has announced it will refund 8,500 of its current residents, alongside an undisclosed number of former residents, who overpaid water charges when the landlord failed to pass savings it made on to tenants.
The 105,000-home housing association is the latest social landlord that has ended up repaying tenants who have been overcharged as part of a long-running saga relating to landlords’ historic contracts with Thames Water.
The refunds will be paid to current and former residents living in former council properties that L&Q acquired in the early 2000s. The schemes are located in Lewisham, Waltham Forest, Enfield and Bexley.
L&Q said it expects to spend around £6.3m refunding customers. When L&Q purchased the schemes, it inherited agreements between the local authorities and Thames Water which required the former to collect water and sewage charges from unmetered residents on behalf of the latter.
Thames Water calculated the bill and L&Q billed the tenants. The housing association was given a discount for empty properties and was paid a commission for the costs of collection and the risk of debt where bills went unpaid.
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L&Q, like other social housing providers at the time, did not pass the benefit of the commission or empty property discounts on to its tenants via lower water charges.
The landlord’s decision to refund 8,500 residents is the latest development in a story that began in 2016 when a High Court judge ruled that Southwark Council had overcharged its tenants by not passing on the reductions it received from Thames Water.
Southwark Council has since agreed to repay 41,000 tenants a total of £28.6m.
In 2019, a High Court ruled that Kingston Council was also liable to tenants for water charges dating back to 2002. This decision was upheld in an appeal last year.
At the time, lawyers representing Kingston Council’s tenants said the ruling “appears to be the last word” on the matter, which has implications for social landlords across the country.
L&Q said its agreements with Thames Water, which ended in 2019, were inherited as part of seven separate local-authority stock transfers.
At the time of the Southwark case, Thames Water told the court it had similar arrangements with 70 councils and housing associations. Following the Southwark ruling, the utility company reviewed its arrangements with these social landlords and drew up a new model contract.
L&Q said it will contact affected residents early next year to let them know how much they are owed. It will also publish information on how its former residents can get in touch to receive a refund.
Update: at 12.26pm, 16.12.21 This story was updated to include the amount of money L&Q expects to spend on refunding customers
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