Resale of utilities and Ofgem's Maximum Resale Price: the tenant reclaim walkthrough (2026)

Most tenants do not know that there is a legal cap on what a landlord can charge them for resold energy or water. The cap has existed for decades — it predates the Renters' Rights Act by a generation — but it operates quietly, in the technical undergrowth of the Electricity Act 1989, the Gas Act 1986, the Water Industry Act 1991, and a series of Ofgem orders that almost nobody reads. The result is that landlords routinely overcharge for utilities, tenants rarely query it, and a meaningful sum of money sits unreclaimed.

This walkthrough is for a tenant who pays for utilities through their landlord — either bundled into the rent, or as a sub-metered top-up on a building-wide supply — and suspects the bill is too high. It covers the legal basis for the Maximum Resale Price, how to work out what the right figure is, how to ask the landlord for the underlying bill, how to calculate and claim back the overcharge, and how to escalate when the landlord will not engage. There is a templated reclaim letter at the end of the calculation section. The piece is England-only — Scottish, Welsh and Northern Irish tenants will need to check their devolved regulators.

The legal basis: where the cap comes from

There are three separate statutory regimes, all running on the same principle: no profit on resold utilities.

Electricity. Section 44 of the Electricity Act 1989 gives Ofgem (the Office of Gas and Electricity Markets) the power to set a Maximum Resale Price. Ofgem has used that power to make orders under which a landlord, caravan-site owner, marina owner, or any other intermediate seller cannot charge a resold consumer more than the licensed supplier charged the seller for the same units, plus a reasonable apportionment of standing charges and VAT.

Gas. Section 37 of the Gas Act 1986 does the same job for gas. The Ofgem Maximum Resale Price order works in parallel with the electricity order. The principle is identical: pass-through cost only, no margin.

Water. The Water Industry Act 1991, through the Water Resale Order made under it, applies the same principle to resold water. A landlord can pass through the actual water bill, with a small per-period administrative charge that the Water Resale Order specifies, but cannot add a profit margin.

The principle is older than the statutes. The reasoning is straightforward. Energy and water are essential, supply is licensed, and intermediate sellers are not licensed suppliers. Allowing them to mark up creates a captive market with no competitive check. Parliament closed that loophole by capping the resale price at cost.

When the rule actually bites

The MRP rules apply in several common scenarios.

Bundled into the rent. Where the tenancy agreement says rent is "inclusive of utilities" or some similar phrase, the landlord is effectively reselling. The rent is the resale price, and the utility component of the rent must comply with the MRP. In practice the rent figure is not split out, so the analysis is harder, but it is still done.

Sub-metered. Where the property is a flat or room on a building-wide supply, and the landlord sub-meters the unit and bills the tenant on top of rent, this is the classic resale scenario. The landlord receives one bill from the licensed supplier, allocates units to each sub-meter, and charges each tenant for their share.

Pre-paid or token meters provided by the landlord. Some HMO landlords install in-house token or key-meter systems that charge tenants per unit. These are resale arrangements and are squarely within the MRP rules.

Shared communal heating systems. Heat networks are subject to their own separate regulations and increasingly to the Heat Network (Metering and Billing) Regulations regime, which has its own consumer protection framework with similar no-profit principles.

If the tenant has their own direct contract with a licensed supplier and pays the supplier directly, the MRP rules do not apply — the supplier's licence conditions govern the price.

How to work out the Maximum Resale Price

The calculation is conceptually simple, even if the arithmetic gets fiddly.

For electricity and gas, the MRP for a billing period is the lower of two figures:

A. The amount the licensed supplier charged the landlord for the units actually used by the tenant, plus a reasonable apportionment of any standing charge and VAT.

B. The amount the tenant would have paid had they been a direct customer of the same supplier on a comparable domestic tariff.

In practice, A is the figure that is usually used in resale arguments. You need three numbers:

• The unit price (pence per kWh) the licensed supplier charged the landlord.
• The number of units the tenant used during the period (from the sub-meter or proportionate share).
• The apportioned standing charge for the period.

Add them together, add VAT at the applicable rate, and that is the MRP. The landlord cannot lawfully charge more.

For water, the MRP under the Water Resale Order is the amount the landlord paid the water and sewerage undertakers, apportioned reasonably between the resold occupiers, plus a small permitted administrative charge. The administrative charge is set in the Order and updated periodically — check the current figure on the Ofwat website.

The evidence trail you need

You cannot calculate the MRP without seeing the underlying supplier bill. That is the single most important document in the entire process. The landlord is obliged to provide it on reasonable request. Ofgem guidance is clear that a tenant on a resold supply has the right to see the bill that the resale is based on.

Ask for:

• The supplier's bill for the period in question, with the unit price, standing charge, and VAT shown.
• The total units billed to the building or property for that period.
• The basis of allocation between resold occupiers if more than one is being billed.
• The dates and amounts you were charged, and the reasoning for those amounts.

Most landlords either produce the documents (in which case you can do the maths) or refuse, hedge or stall (in which case you have a referral point to Ofgem and Trading Standards).

Template letter: request for utility bill and reclaim of overcharge

Send this to the landlord or letting agent, by email and recorded delivery. Adapt the bracketed parts. If you are asking for the underlying bill before you can calculate the overcharge, send the first part only; once you have the bill and have calculated the overcharge, send the second part.

Dear [Landlord / Agent name],

Re: [Property address] — utilities resale and Maximum Resale Price

I am writing in connection with the charges I have been paying you for [electricity / gas / water] for the period [start date] to [end date]. During that period I paid £[amount] to you for these utilities, either as a separate charge or as part of an inclusive rent.

Under section 44 of the Electricity Act 1989 / section 37 of the Gas Act 1986 / the Water Resale Order made under the Water Industry Act 1991, the maximum you may lawfully charge me for resold [electricity / gas / water] is capped by the Ofgem Maximum Resale Price [or, for water, by the permitted pass-through plus administrative charge set out in the Water Resale Order]. The cap is, in summary, the cost charged to you by the licensed supplier for the units I used, plus a reasonable apportionment of standing charges and VAT, with no profit margin.

So that I can confirm whether the amount I have paid is within the cap, please provide within 14 days:

1. A copy of the supplier's bill (or bills) for the period in question, showing the unit price, standing charge and VAT.
2. The total units used at the property or building during the period.
3. The basis on which units have been allocated to me as compared with any other occupiers.
4. A clear schedule showing how the amount I have paid was calculated.

[Part 2 — once you have done the calculation:] Based on the figures provided / based on the figures I have been able to obtain, the lawful maximum for the period was £[MRP figure]. I have paid £[paid figure]. The overcharge is therefore £[difference], which I am asking you to refund within 28 days.

If the documentation is not provided, or the overcharge is not refunded, I will refer the matter to the Citizens Advice consumer service (which handles Ofgem complaints) and to my local Trading Standards. I will also consider a claim in the small claims track of the County Court for recovery of the overcharge.

I would prefer to resolve this directly. Please let me know how you would like to proceed.

Yours, [Name, date]

Keep a copy. Send by email and by recorded delivery. Record the date of dispatch and any replies.

How to calculate a reclaim across a longer period

Once you have established that you have been overcharged for one billing period, it is almost always worth running the calculation across the whole period of overcharging. The reclaim is not limited to the last 6 months as a matter of statute — the limitation period for a simple contract claim is 6 years in England and Wales. In practice, claims older than 12 months become harder to evidence because supplier bills are not always available and sub-meter readings drift.

Build a table:

• Column 1: Billing period (start, end).
• Column 2: Units used by you in the period.
• Column 3: Supplier unit price for the period.
• Column 4: Apportioned standing charge.
• Column 5: VAT.
• Column 6: MRP for the period (sum of 3, 4, 5 applied to 2).
• Column 7: Amount you were charged.
• Column 8: Overcharge (column 7 minus column 6).

Total column 8. That is your reclaim figure.

If unit prices changed during the period (which, in 2024-2026, they did repeatedly), break the rows into sub-periods to match the supplier's tariff history.

Escalation routes when the landlord will not engage

If the templated letter is ignored or refused, the escalation route has four tiers.

1. Citizens Advice consumer service. This is the official Ofgem-redirect route for resale disputes involving energy. They take the details, log the complaint, and signpost the next step, which is usually Trading Standards.

2. Trading Standards. Local Trading Standards departments handle complaints about resale of electricity, gas and water under their consumer protection remit. They can investigate, issue warnings, and in serious cases take enforcement action.

3. The Energy Ombudsman. For some resale arrangements, the Energy Ombudsman may have jurisdiction. Citizens Advice can confirm in your specific circumstances.

4. The County Court small claims track. For the actual recovery of the overcharge, a money claim in the County Court is the standard route. Use the online Money Claim Online service. The small claims track applies to claims under £10,000, with fixed and modest court fees and limited costs exposure.

In parallel with these routes, the Renters' Rights Act 2025 brought in Decent Homes Standard and Awaab's-Law-style protections that now apply to the private rented sector. Where utility overcharging is happening alongside disrepair, damp, or unsafe heating systems, the regulatory picture against the landlord can be much wider than just MRP. Council environmental health is a useful parallel referral.

Retaliation and your protection

Some tenants worry that asking for utility bills or claiming an overcharge will lead the landlord to evict. Since the Renters' Rights Act abolished Section 21, no-fault eviction is no longer available. A landlord wanting to evict has to plead a Section 8 ground, prove it, and survive the discretionary or mandatory test.

Retaliatory action — for example, serving a Section 8 notice the day after you raise an MRP complaint — is poor optics in front of a judge and a strong argument on reasonableness for any discretionary ground. The council's tenancy relations officer has powers to intervene against harassment or unlawful eviction, and is the right call if the landlord's response goes beyond the legitimate.

When to use RentSOS

RentSOS focuses on rent increase challenges under Section 13. The MRP rules sit alongside that — they govern utility resale rather than the rent itself — but the two interact directly where utilities are bundled into the rent. If you have been served a Section 13 notice and the landlord is justifying the increase on energy or service costs, the RentSOS check will look at the rent against the local market and tell you whether there are grounds to challenge. A challengeable rent plus a likely MRP overcharge is a much stronger negotiating position than either point alone.

A calmer last word

Utility resale rules are a quieter corner of housing law and they reward a careful, evidence-led approach. There is no drama in the templated letter or the spreadsheet. There is just the patient request for the underlying bill, the calculation, and the reclaim figure. That patience is, in this corner of the law, the whole game. Ask for the bill, do the maths, write the letter, escalate if you have to, and remember that the cap exists for a reason — your home is not a profit centre for someone else's pass-through.