MORE than 2,000 Waverley council tenants are to receive pay-outs totalling up to £400,000, after a landmark legal case resulted in the borough council ending a long-standing arrangement to collect water charges from council tenants via their rents.
In a test case bought by a London council tenant in March 2016, the High Court found Southwark Council, which has an “almost identical” contractual relationship with Thames Water to Waverley, had overcharged housing tenants for their water between 2010 and 2013.
Waverley, like Southwark, regarded itself as acting as an ‘agent’ for Thames Water and received a commission of eight per cent for the provision of billing and collection services.
The eight per cent commission, amounting to around £80,000 per annum, was paid into Waverley’s housing revenue account to support its service to tenants.
The High Court ruled that Southwark - and therefore Waverley, as well - was not acting as an agent but a ‘re-seller’ for Thames Water and that the commission charges made to tenants were excessive.
The verdict was a ‘double whammy’ for Waverley. It was not only hit by overcharging claims from tenants dating back six years under the legal limitation period, which it estimated would amount to between £200,000 and £400,00, but it will also lose the £80,000 per annum commission spent on housing revenue account services.
Waverley was one of up to 70 local authorities and housing associations hit by the legal ruling. It took legal advice and consulted tenants on its own arrangement with Thames Water and the amount of commission owed to tenants.
As a result more than 2,000 council tenants were paid an average of £27 to their rent account, for each of the past six years that their water charges were paid in this way.
On Monday this week, Waverley announced that from October 2017 tenants will pay their water bills directly to Thames Water.
The council is working with Thames to assist with the transfer and ensure that tenants’ contact details are shared and payment plans are in place.
Waverley’s portfolio holder for housing Carole King said: “The whole issue was dealt with promptly and in a transparent way with tenants. With Thames Water there will be a range of payments plans available to tenants and the opportunity to review tariffs. We will write to all tenants affected in the near future.”
Thames Water will attend the All Tenants Open Meeting run by the tenants panel on Thursday, July 13, which will take place from 10.30am to 1pm at Godalming Baptist Church Hall.
• Former tenants who have lived in an unmetered council property can apply for a refund online www.waverley.gov.uk/housing.