Water charge refunds
Frequently asked questions
Why am I receiving a refund?
Water in the borough is supplied by Thames Water Utilities and Sutton and East Surrey Water. By agreement with these companies, Sutton Council and Sutton Housing Partnership (SHP) collected water charges from tenants at the same time as collecting rent and received commission for doing so up to 1 April 2018. This arrangement was common practice across local authorities. No council tenants paid any more for their water and sewerage services than they would have paid if they had been paying for their water directly.
In 2016 Southwark Council were challenged on the legality of this arrangement and ordered to reimburse their tenants for the amount they had been found to have overcharged. In 2018 Kingston Council was similarly challenged for overcharging tenants. Following an appeals process to clarify the law, the Court of Appeal made a judgement in October 2020. The judgement means that some tenants could be eligible for a refund for part of the charges.
How much will my refund be?
If you are currently a tenant in Sutton we have sent you a letter to let you know how much your refund is. There have been some delays with the postal service recently so please allow a few days for the letter to reach you. Alternatively, you can check your rent account balance online.
We will write to current leaseholders in Sutton that were Sutton Council tenants during the period 1 April 2001 to 31 March 2018 in February if you are eligible for a refund. This will include details on the amount of refund that is due to you and how to make a claim. Alternatively, you can apply for a refund by completing this form.
Why will I only get a refund if I was a tenant between 2001 and 2018?
1 April 2001 was the date the Water Resale Act came into force. Any agreements between Water Companies and Local Authorities from this date fall under what has been determined to be water resale agreements. Any commission received by the Council or SHP from this date is now being refunded to tenants.
In March 2018 the agreements held by SHP with the Water Companies were terminated and no further commission was received. Tenants paid charges for water directly to the Water Companies from 1 April 2018.
Can I leave the credit amount on my rent account to pay for future rent payments?
Yes you can, you do not need to claim the refund. The adjustment will be made to your rent account and can be used to make future rent payments.
How long will it take to get the refund?
If your rent account was already in credit prior to this adjustment, we will automatically transfer the refund to your bank account that is attached to your rent account if a payment was made later than 1 December 2020. This will be completed by the end of January 2021.
For those whose rent accounts are in credit and we do not currently have your bank details, you can apply to have this money sent to you by completing a refund request form.
Refunds will be processed as soon as possible but please allow three weeks from the date you complete the form.
How do I claim my refund?
If you do not currently pay your rent by Direct Debit, please complete a refund request form.
What if I was a tenant during the period 2001 to 2018 but I am not now?
The value of the refund due to former tenants will be calculated in the same way as for current tenants which is described below.
Due to data protection requirements we do not hold current addresses for most former tenants so we are unable to contact you directly. However, if you were a Sutton Council tenant during the period 1 April 2001 to 31 March 2018 and paid water rates and sewerage charges with your rent you may be eligible for a refund of the commission we received. If you think you are eligible for a refund you will need to complete a refund request form.
In order to process claims from former tenants you may be contacted and asked to provide proof of tenancy (rent reference number) and proof of identity. This is to enable us to protect against fraudulent claims.
We will write to current leaseholders in Sutton that were Sutton Council tenants during the period 1 April 2001 to 31 March 2018 in February if you are eligible for a refund. This will include details on the amount of refund that is due to you and how to make a claim. Alternatively, you can apply for a refund.
Any arrears still outstanding relating to your former rent account will be deducted from any refund due.
What will happen if my credit adjustment is higher than any arrears on my account?
If the credit adjustment is higher than any arrears against your rent account you can apply for the remaining credit by completing a refund request form.
How has my credit adjustment been calculated?
To help explain how the refund is calculated we will use an example where the water charges paid by a tenant in one year was £305.96.
The commission added to this charge at 12% is £36.71 for one year. The Council was entitled, under the Water Resale Order, to charge 1.5p per day or £5.44 per year for the collection of water charges. The refund due for that year is the difference between the commission charged and the allowable admin fee - i.e. £36.71 - £5.44 = £31.27. This calculation is carried out for each year a tenant was charged during the relevant period.
In addition, interest is added to the amount calculated above. This is in recognition of the fact that this money has been held by the Council for a number of years.
The calculation is made in two time periods during which different interest rates applied: 1 April 2001 to 31 March 2006 and 1 April 2006 to 31 March 2018. The reason interest is calculated differently for these two periods is due to the change in the water resale order in 2006 which changes how this should be done.
From 1 April 2001 to 31 March 2006, interest is added at the Bank of England base rate plus 1% applied from the date of the charge to the date the refund was applied to your rent account (17 January 2021). For the period from 1 April 2006 to 31 March 2018 interest has been added at twice the average Bank of England base rate for the period from when the charge was made to when the refund was applied to your rent account.
Further information on the 2001 and 2006 Water Resale Orders is available in the following OFWAT guide to water resale:
If you require assistance with this application, please contact us on 020 8915 2000 and we can assist you in making the application.