Communal areas in blocks of flats: what happens if the business energy bill isn't paid?

Energy for the communal areas of a block of flats is supplied under a business (non-domestic) contract held by the landlord, freeholder or managing agent. If that bill goes unpaid, Ofgem now expects suppliers to warn residents, involve the council and, in some buildings, the fire service before any disconnection.

This guide is for landlords, managing agents and residents' management companies. It's general information, not legal or financial advice.

Why is communal energy a business contract?

The supply to hallways, stair lighting, door entry systems, lifts or shared plant isn't a home supply. It's bought by whoever runs the building, so it sits on a non-domestic contract, even though the people relying on it live there.

That has two practical effects. First, business contracts are not covered by the household energy price cap, as Ofgem's guidance for residents points out. The price you pay depends on the contract you agree, or on deemed or out-of-contract rates if no one has agreed one. Second, the protections that apply depend on the customer. A small residents' management company may count as a microbusiness, which brings extra rights on notice, back-billing and complaints. Our microbusiness guide explains the test.

What changed in Ofgem's June 2026 guidance?

On 9 June 2026, Ofgem updated its good practice guidance on debt and disconnection for non-domestic suppliers. It first published the guidance as an open letter on 20 December 2022. The update adds a section on supplies to communal areas of buildings with domestic residents.

Ofgem says this is good practice, not a licence condition. Suppliers aren't formally bound by it, but it sets out what Ofgem expects. For communal supplies, it says suppliers should:

1. Contact the right party. Write to the contract holder at the managing agent's or landlord's registered address, as well as at the building itself.
2. Tell residents, sensitively. Residents are entitled to know what's happening. Suppliers must make clear that the contact is for information only, because residents are not responsible for the debt. This applies to any debt collection agency the supplier uses, too.
3. Contact the local authority where safety could be affected. The council may help find whoever is responsible for the bill. If disconnection goes ahead, it can plan to rehome residents who can't stay in a building without power to the communal areas.
4. Alert the fire service for taller buildings. For buildings over five floors, suppliers should tell the local fire brigade before disconnecting.
5. Remember building safety plans. Buildings over 18 metres need safety plans agreed with the Building Safety Regulator, including a simultaneous evacuation strategy that a loss of power would affect.
6. Record residents on site visits. Visit notes should show when residents have been identified and how they'd be affected, so plans can be made.

How much notice must a supplier give before disconnecting?

The same legal minimum applies to every business customer. Ofgem's guidance says the Gas Act 1986 and Electricity Act 1989 require at least 7 days' written notice before a supplier disconnects you or fits a prepayment meter for debt. That notice can't be given until 28 days after a written demand for payment. These rules apply to traditional, smart and automated (AMR) meters.

So the earliest a supplier can act is around 35 days after a written demand. For a communal supply, that's not much time to organise payment across leaseholders. Our deadlines guide puts this alongside the other time limits.

Ofgem also expects suppliers to treat disconnection as a last resort, use supportive rather than threatening language, and make sure debt collectors follow the same approach.

What should a supplier offer if the bill can't be paid?

Ofgem's guidance encourages suppliers to:

• offer repayment plans that suit the customer, with flexible collection
• consider your ability to pay and whether a longer repayment period is appropriate
• check whether you're on the best tariff available to you

Ofgem's advice to businesses is to contact the supplier early and ask about a payment plan, payment breaks, more time to pay or hardship funds. Business Debtline gives free debt advice to businesses. Our guide to business energy debt covers the wider rules.

Can a supplier ask for a security deposit?

Yes. Ofgem's guidance says a supplier may ask for a deposit when you take on a supply, and that the amount should be reasonable. It notes some suppliers use up to three months of expected energy use as a typical starting point. Any deposit needed to reconnect should also be reasonable and shouldn't unfairly block reconnection.

For a block that changes managing agent, budget for this. A new contract holder may be asked for a deposit even if the building has never missed a payment.

What can residents do?

If you live in the building, the supplier should treat you as someone affected, not as the debtor. Ofgem's June 2026 guidance says landlords or managing agents who fail to supply energy are breaching the lease, which is why residents are entitled to be told.

Practical steps for residents:

• Ask the managing agent or landlord who holds the communal contract and whether it's up to date.
• Never pay a supplier or debt collector directly for a communal debt unless your lease or management company tells you to. You're not responsible for it.
• If someone in your flat is older, disabled or has a long-term condition, join your network operator's Priority Services Register. Ofgem's guidance encourages suppliers to suggest this.
• Contact your council if a disconnection notice affects lifts, lighting or fire safety systems.

If you pay your landlord for energy to your own flat through their business contract, different rules apply. Ofgem says a landlord can't make a profit on energy they resell, and you can ask to see the bills and contract. It doesn't apply if energy is simply included in your rent or service charge.

How can you keep a communal supply secure?

• Put the contract end date and notice period in the building's diary, so it doesn't roll onto out-of-contract rates. Our contract notice calculator helps.
• Make sure the supplier has a current billing address for the managing agent, not just the building.
• Check bills against meter readings. Estimated bills can build up a large catch-up bill; see our back-billing guide.
• Hold enough in the service charge budget to cover the bill and any deposit when the agent changes.
• Use our cost estimator to sense-check what the communal supply should cost.

What to do next

• ○Confirm who holds the communal energy contract and the registered address the supplier uses
• ○Note the contract end date and the notice deadline
• ○Check whether the contract holder counts as a microbusiness
• ○If a payment demand arrives, contact the supplier within days and ask for a repayment plan
• ○Tell residents what's happening and that they aren't liable for the debt
• ○For buildings over five floors or 18 metres, check how a loss of power would affect your safety plans
• ○Get free advice from Business Debtline if the debt can't be paid