Tom Melhuish 5 min read

A Guide to Deemed Contracts

Most businesses in England pay for their water supply under a deemed business water contract.

Deemed contract terms are automatic and legally binding. Our business water experts have prepared this guide explaining deemed contract terms, cost implications and risks.

What is a deemed contract?

A deemed contract is the automatic terms and conditions that apply when you use a water supply but do not have an agreement with the supplier.

Here are the typical scenarios where businesses are subject to deemed water contracts:

Here, we will cover the important terms and conditions of a deemed business water contract.

Terms of a deemed business water contract

The terms of a deemed business water contract are carefully regulated by Ofwat, and the Water Industry Commission for Scotland.

Here’s a summary of the terms and conditions:

Term: A deemed water contract starts from the date you begin using water/sewerage/trade effluent services until:

Service: Water and sewage services will be supplied to your property, consistent with the standards across the British Water Industry.

Charges: Your supplier can issue business water bills at any time, including in advance, with charges in line with their published default business water tariffs.

Switching: You can cancel a deemed business water contract at any time by switching to another supplier unless you have outstanding unpaid bills.

💡 All business water suppliers publish their deemed contracts on their websites. If you don’t know who the current supplier is, visit our ‘find my business water supplier’ page.

Cost implications when staying on a deemed contract

In England and Scotland, deemed business water rates are needlessly expensive.

Default business water rates increase on April 1st each year. The regulators allow the rates on deemed business water contracts to increase ahead of inflation to encourage competition in the water market.

Find out how much you can save by switching to a fix water contract with our business water comparison service.

Businesses that have never switched water supplier

In April 2017, the English business water market was deregulated, with the supply of all commercial properties switching from a wholesaler (Thames Water, etc.) to a default business water supplier.

From April 1, 2017, all businesses began paying for their water services under a deemed contract with their assigned default water supplier.

Ofwat’s latest report shows that 73% of businesses remain supplied by their default supplier, and most are under default contract terms and conditions.

What are the risks associated with a deemed contract?

The terms of deemed water contracts are carefully regulated and designed to have fair terms and conditions for all customers who have not agreed to different contract terms with their supplier.

However, there are some important negative aspects of deemed business water contracts:

  • They are at least 15% more expensive than simple fixed water tariffs in the open water market.
  • Some suppliers issue their business water bills in advance, making you pay for water you haven’t yet used.
  • Some suppliers only offer 15-day payment terms on their water bills.
  • Deemed business water rates increase significantly each year.
  • You will receive separate water bills for all your properties rather than consolidating your bills with a single contract.

Can I switch from a deemed water contract?

Yes, deemed business water contracts do not have any exit fees associated with switching to another supplier. At AquaSwitch, we have helped thousands of businesses switch to another supplier.

Find out how much you can save today with our business water comparison service.

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