Change of Tenancy - Moving your business premises

Moving to new business premises is an exciting, positive step for your company. But with a ton of things such as equipment, internet and insurance to set up, it’s bound to be a challenging period. And as long as the property has a gas and electricity supply, your business energy contract is probably the last thing on your mind.

But if you don't set up a new contract before you move in, you'll almost certainly end up overpaying for energy.

What is a Change of Tenancy (COT)?

A Change of Tenancy (COT) occurs when a business moves in or out of premises, transferring the responsibility for the energy supply to a new occupant.

• Incoming COT: When your business moves into new premises and takes over the energy supply.
• Outgoing COT: When your business vacates premises and needs to end the energy contract associated with that location.

In either case, it’s essential to inform your energy supplier about the change. This ensures a smooth transition and prevents unnecessary charges.

The Incoming COT Process

If your business is moving into new premises, follow these steps:

1. Complete a COT form: Provide details about your business, the outgoing tenant, and the landlord.
2. Submit proof of tenancy change: This typically involves sharing a fully signed and dated lease agreement.
3. Supplier validation: Your supplier will verify the details using the lease agreement and may contact the landlord or outgoing tenant for confirmation.
4. Account setup: Once the supplier validates and accepts the change, they will set up your business account. From here, you can either agree to a new contract or compare energy quotes and switch suppliers.

When moving premises, you also need to consider the following:

• Suppliers only process a COT when a business physically relocates to a new property. Changes to a business name or legal entity do not qualify as a COT.
• If your business undergoes a name or entity change, your current energy contract will remain in place, with updates applied to reflect the new details until the contract’s end date.

Start your move on the right foot by staying informed and ensuring all the necessary steps are taken for a seamless energy transition.

What happens when you move out of your old premises?

Your business electricity and gas contracts will cease on the day you leave your old building. This is because your energy deal is linked to your supply point.

You shouldn’t normally be charged a penalty fee for exiting your contracts early because you’re moving premises, but be sure to check the terms and conditions of your deal. You may need to provide your old supplier with proof that you are giving up control over your old building.

On the day you move out, note down or take a photo of your electricity and gas meter readings and give it to your old suppliers so they can process your Change of Tenancy notification. Depending on the balance of your account, you’ll either be charged a final bill or be refunded. It’s a good idea to leave any direct debits in place until you get these final bills.

To help things go as smoothly as possible, give your business energy suppliers at least one month’s notice of your planned moving date and make sure they have your new address so they can send your final bills.

Can you transfer your current energy deal to your new premises?

Moving business premises is a great opportunity to negotiate a better energy deal.

If you’d like to transfer your business’s current energy deal to your new address, you’ll need to talk to your supplier. While it may be possible, it’s more likely that you’ll have to arrange a new deal as your supply contract takes things like location and business size into account. 

If the terms of your old contract stipulate that you’ll be charged a termination fee for leaving early, they may be waived if you choose to use the old suppliers once again.

What happens when you move into a new business premises?

On the day you move your business into new premises, you should again take a note or a photo of your new meter readings and submit them to both the current suppliers of your new property and your chosen new suppliers.

To find out who is currently supplying your premises with gas, call the meter number helpline on 0800 088 6986. For electricity, phone the Local Electricity Distribution Company for your area.

When you move into your new premises, you’ll automatically be transferred onto a ‘deemed’ rate with the building’s current suppliers. These are expensive rates so it’s important that you move your company off them as soon as possible.

In some cases, the supply to your new building may have been disconnected because the old tenant failed to pay their bills. You may have to pay a reconnection fee or a deposit to get it reinstated. If your building is brand new, then you’ll also have to pay a connection charge and the supply could take some time to set up.

Your new building may let you benefit from energy efficiency savings so enquire about a certificate with the property manager if you’re a tenant or conduct an audit if you’re the owner.

Who pays your business energy bills?

In some situations, your tenancy may stipulate that you pay your business energy bills directly to your landlord who will then pay the supplier. You’ll need to talk to your landlord if you wish to change energy suppliers or deal, although this may not always be possible.

Even if your landlord pays the supplier, you will still be responsible for making sure your energy accounts stay in balance. Check the terms of your tenancy agreement thoroughly so you’re aware of how your energy bills are managed.

What is a Deemed Contract?

A deemed contract is an energy agreement that applies when a business moves into new premises and has not yet arranged a fixed-rate energy deal with a supplier.

Deemed rates are variable and typically among the most expensive tariffs offered by suppliers. The good news is that you can compare quotes and switch to a more cost-effective fixed-rate deal at any time, helping you save on your energy bills.

How to compare business energy deals

Moving business premises is the prime time to see what energy deals are on offer and change to a great new agreement or supplier.

To do this, contact suppliers individually to request bespoke quotes. Dual energy contracts aren’t available for business customers so you’ll have to do this for both your business gas and electricity supplies. Negotiate to get the best deals and compare the unit cost and the standing charge as well as the service you’ll receive.

Switching energy deals will benefit your company’s bottom line, but it can feel like a time consuming and confusing process.

MoneySuperMarket has teamed up with Bionic to help take the hassle out of business energy comparison. The tech-enabled experts help you compare rates from a range of suppliers and support you through the switch - so you can concentrate on running your business.

A short screen share call is all it takes to gather the most competitive rates from our panel of trusted UK energy suppliers. They’ll then talk you through the results to make sure you know exactly what each supplier has to offer.

Once you’ve found the rates that suit you the best, they'll get in touch with your old and new suppliers to ensure there’s no disruption to your supply. The switch should take about six weeks.

Call Bionic today on 0800 140 4667 to hear more about how the tech-enabled business energy can save your business money by switching your energy deals.