Heat network back-billing and service charges
Many blocks recover heating costs through the service charge rather than separate heat bills. Ofgem's rules recognise this, and some housing law takes precedence. Here's how the two fit together.
Last checked against official sources: 5 October 2026
Ofgem's 12-month back-billing limit
Ofgem's rules aim to stop suppliers back-billing heat network consumers for heating, cooling or hot water used more than 12 months before the date of the bill, where the customer is not at fault.
Where heat is paid through the service charge
Ofgem says that where charges are recovered through a service charge, as defined in section 18(1) of the Landlord and Tenant Act 1985, they are not covered by the 12-month back-billing limit. From the start of regulation, and until further notice, section 20B of the Landlord and Tenant Act 1985 takes precedence.
What section 20B says
Section 20B says that if costs were incurred more than 18 months before a demand for payment is served on the leaseholder, the leaseholder doesn't have to pay the part of the service charge that reflects those costs. That doesn't apply if, within those 18 months, the leaseholder was told in writing that the costs had been incurred and that they would have to contribute to them through the service charge.
Ofgem notes that where there are several landlords involved, this can result in longer back-bills.
Ofgem's best practice for metered blocks
Where the 18-month limit still applies, Ofgem encourages networks with individual metering to keep to the 12-month limit, with regular, timely and accurate bills. It says existing housing law shouldn't stop metered networks aiming for this.
Billing information
Ofgem's billing and price transparency condition also applies where heat is charged through service charges, with some differences. Residents should be told who to contact, where to get free advice and how to complain.
Where leaseholders take disputes
Ofgem says that for consumers in England and Wales whose homes fall within the Landlord and Tenant Act 1985, the First-tier Tribunal remains the main route for complaints and redress. It says suppliers should tell consumers they can contact their supplier, Citizens Advice and the Energy Ombudsman, and, where appropriate, the Regulator of Social Housing, LEASE and the First-tier Tribunal.
The Energy Ombudsman says it can't review billing and payments relating to standing charges or a capital replacement fund charge.
Questions
- We send heat bills separately from the service charge. Which rule applies?
- If the charges aren't service charges under section 18(1) of the Landlord and Tenant Act 1985, Ofgem's 12-month back-billing limit applies. Check how your lease and billing are set up, and take advice if unsure.
- Can a leaseholder go to the Energy Ombudsman about the service charge?
- Ofgem says the First-tier Tribunal remains the main route for service charge disputes. The Energy Ombudsman says it can't review standing charges or capital replacement fund charges. Other heat complaints can go to the Energy Ombudsman.
Sources
Related guides
Heat network complaints procedure: what Ofgem requires
What Ofgem requires of a heat network complaints procedure: what to include, telling residents every year, keeping records and the 8-week Ombudsman route.
The Energy Ombudsman for heat networks
Heat networks must join the Energy Ombudsman scheme. When residents can go to the Ombudsman, what a deadlock letter does and what it can't look at.
Heat network financial resilience reporting
The financial resilience data Ofgem asks heat network operators and suppliers for, when it's due each year, and the ring-fencing of maintenance funds.