When a business moves into new premises, it automatically enters a deemed contract with the existing supplier at uncompetitive rates. The COT process requires notifying the supplier with a meter read, establishing the outgoing tenant's final liability, and switching to a new contract as quickly as possible. Delays are expensive.
Last reviewed: 12 May 2026
The Change of Tenancy Problem Almost Every Business Faces
Taking over commercial premises is one of the most common triggers for a business to end up on a deemed energy contract. A deemed contract is not something you sign. It is the default arrangement that applies when a business occupies premises without an active contract in place. The rates charged under deemed contracts are set by the supplier without negotiation and are typically significantly higher than those available on a fixed-price agreement.
Ofgem's rules require suppliers to notify customers of deemed contract terms, but they do not cap the rates suppliers can charge. The consequence is that businesses that fail to act quickly on taking over premises can pay materially inflated energy costs for weeks or months while the COT process completes and a new contract is arranged.
This guide covers the COT process step by step, what each party is liable for, and how to exit a deemed contract as fast as possible.
What Is a Change of Tenancy in Energy Terms
A change of tenancy (COT) notification is the formal process by which a supplier is informed that the occupant of premises has changed. It triggers a new account to be opened for the incoming tenant and a final bill to be raised for the outgoing one. The process is separate from any commercial lease arrangement between landlord and tenant: energy suppliers operate their own records based on meter point data and occupancy notifications, not on lease terms.
The energy market uses two reference identifiers that must be correctly transferred during a COT:
- MPAN (Meter Point Administration Number): The unique 21-digit reference for an electricity supply point, held in the MPAN database operated by each Distribution Network Operator (DNO)
- MPRN (Meter Point Reference Number): The equivalent reference for a gas supply point, held in the national Xoserve database
Both identifiers remain with the property, not the occupant. When a tenant changes, the supplier updates its records to reflect the new occupant's account against the same MPAN or MPRN.
Step-by-Step: The COT Process
Step 1: Identify the existing supplier
Before or immediately on taking possession of premises, identify the current gas and electricity suppliers. If the previous occupant or landlord cannot provide this, use the following routes:
- Electricity: contact your regional DNO or use the Electricity Central Online Enquiry Service (ECOES) via the Energy Networks Association
- Gas: contact Xoserve on 0870 608 1524 or use the Find My Supplier service available via the Meter Point Administration Service
Step 2: Take opening meter readings
On the first day of occupation, take photographs of all gas and electricity meters showing the meter serial number and register reading. Record the date and time. This establishes your opening read and is the basis for splitting liability between the outgoing and incoming occupant.
Do not rely on estimated reads. Estimated reads used at the start of a tenancy frequently result in billing disputes that take months to resolve.
Step 3: Notify the existing supplier
Contact the existing supplier as soon as possible after taking possession. Provide:
- Your business name and contact details
- The MPAN or MPRN for the supply point
- Your opening meter reading with date
- The date you took possession
Most suppliers have a dedicated COT team or web form. The notification period within which suppliers must process a COT and open a new account is governed by Ofgem's licence conditions. Suppliers are generally required to acknowledge COT notifications within a defined number of working days and to backdate the new account to the date of occupation where that date is confirmed by documentary evidence.
Step 4: Understand the deemed contract terms
Once your account is opened, the supplier will place you on a deemed contract. Request the specific unit rates and standing charges that will apply. Ofgem requires suppliers to make deemed contract terms readily available and to inform new occupants of their right to switch.
Deemed rates are typically 30 to 50 per cent higher than market-rate fixed contracts for equivalent consumption. The deemed contract does not lock you in: you have the right to switch supplier once the account is established.
Step 5: Obtain a market comparison and switch
As soon as the account is open, obtain quotes from alternative suppliers. The switch process for a small business typically takes 28 days from contract signature to supply transfer. Some suppliers offer faster transfers in certain circumstances.
During the switching period you remain on the deemed contract and continue to be billed at deemed rates. The 28-day window means acting quickly on day one of occupation can save a meaningful amount compared to waiting several weeks before seeking a better deal.
What the Outgoing Tenant Is Liable For
The outgoing tenant is responsible for energy consumed up to and including the final day of their occupancy. If a final meter read cannot be agreed between the supplier and the outgoing tenant, the supplier will use an estimated read, which may result in a disputed final bill.
Common sources of dispute include:
- An incoming tenant taking an opening read that does not match the supplier's estimated closing read for the outgoing tenant
- Energy used between the outgoing tenant vacating and the incoming tenant taking possession (a vacant period), for which liability typically falls to the landlord
- Deposits held by the supplier that the outgoing tenant wishes to recover
If the property was vacant before your occupation, the landlord is typically responsible for energy used during that vacant period. However, if the landlord failed to notify the supplier of the vacancy, the supplier may have continued billing the previous tenant or placed the supply on a deemed supply basis to the landlord. Establishing the correct billing timeline at the start of occupation avoids inheriting someone else's liability.
The Vacant Property Trap
A vacant commercial property does not stop consuming energy. Frost protection on heating systems, security lighting, alarm systems, and refrigeration for food businesses may all continue to draw supply during a vacancy. The supplier will bill whoever is registered as the account holder for that consumption.
When taking over premises that were vacant for an extended period, check whether:
- The previous supplier has an outstanding balance that could complicate the switch
- There is a deemed contract or deemed supply already in place to the landlord
- Any direct debit was set up on a previous occupant's account that has lapsed, leaving debt on the meter point
Clearing any outstanding balance is a prerequisite for switching to a new supplier in most cases. If you believe charges relate to a period before your occupation, raise a formal dispute with the supplier and provide documentary evidence of your move-in date.
Switching Away from the Inherited Supplier
Once the deemed contract is in place and the account is established, the switching process is the same as any other business energy switch. The key differences from switching mid-contract are:
- There is no exit fee on a deemed contract
- The standard transfer period is 28 days
- You do not need to give notice in the way that applies to a fixed-term contract
To switch, obtain at least three quotes using your actual consumption data from the previous occupant (if available) or the supplier's estimated annual consumption figure for the meter point. Sign the new contract, and the new supplier will manage the transfer process directly with the existing supplier via the MPAN or MPRN transfer protocols.
The business energy bills explained guide covers how to read your first bill and what the line-item charges mean once you are on a contracted rate.
Frequently asked questions
Editorial disclaimer: This information is provided for general guidance only. Energy liability disputes involving landlords, outgoing tenants, or estimated billing should be referred to an independent energy adviser or Ofgem's dispute resolution process.
What is a deemed contract in business energy?
A deemed contract is the default supply arrangement that applies when a business occupies premises without a signed energy contract. The rates are set by the existing supplier and are typically significantly higher than contracted market rates.
How quickly can I switch away from a deemed contract?
There is no minimum notice period or exit fee on a deemed contract. Once the account is established, you can sign with a new supplier and the transfer completes in approximately 28 days.
Am I liable for energy used before I moved in?
No, provided you can evidence the date you took possession. Take a dated photograph of the meter readings on day one and retain your lease or tenancy agreement as supporting documentation.
What if I cannot identify the existing supplier?
Use the Electricity Central Online Enquiry Service (ECOES) for electricity and the Xoserve MPRN lookup service for gas. Both provide the registered supplier against a meter point reference.
Can the landlord be held responsible for energy during a vacant period?
In most cases, yes. The landlord is typically the responsible party for energy consumed during a period when no tenant is in occupation. If the supplier is billing you for a period before your occupation, raise a formal billing dispute and provide your move-in documentation.
How we verified this
This article draws on published guidance from Ofgem, the Department for Energy Security and Net Zero, and the primary legislation and regulatory sources listed in the Sources section. No aggregator or supplier-produced content was used as a primary source.
