What contract length should I go for if I anticipate a move in the future?
Customers frequently ask what contract length duration they should take if they anticipate a move in the near future. Many clients mistakenly think it is better to opt for a shorter term contract, i.e. one that ends pre-move date. This is not advisable in most situations. For most customers you are better off securing a contract that will see you through your move date, and then terminate the contract early. Most supply contracts do not penalise a client if they move out prematurely, but see the contracts terms and conditions for the specifics, as you don’t want to get caught out by a minimum take clause or similar penalty. If you are a larger client and know your move out date in advance, we can request a contract length according to your specific date. Smaller customers normally have to choose from a year or multiple year duration, as most suppliers will not offer a bespoke contract length for the smaller customer. But we do work with some suppliers that can accommodate this request.
A business has a contract start date of February 1st, 2019.
Their lease ends October 1st, 2020.
Which option is best?
Scenario A: Client secures a 12 month contract 01-Feb-2019 – 31-Jan-2020, then goes out of contract from 01-Feb-20 onward. Most Expensive! The business will be charged very expensive rates from 01-Feb-20 – 01-Oct-20. That is 8 months paying somewhere between double and triple a contract rate.
Scenario B: Client secures a 12 month contract 01-Feb-2019 – 31-Jan-2020, then another 12 month contract 01-Feb-20 – 31-Jan-21 and cancels the contract 01-Oct-20 at the time of the move. Price competitive but wastes a lot of time. As the old saying goes, time is money, so customer loses on this front. Customer has to negotiate two contracts and a Change Of Tenancy within a short period of time, plus prices will vary between the contract years, so budgeting becomes more difficult. Tedious, time consuming, and inefficient.
Scenario C: Client secures a 24 month contract 01-Feb-2019 – 31-Jan-2021 and cancels the contract 01-Oct-20 at the time of the move. Price competitive and time efficient. Customer secures a single contract and terminates early on move out date. This saves so much time, which is especially important when planning a relocation. Plus, budgeting and administration workload is halved, only one contract to secure instead of the two featured in scenario B.
Most suppliers require the customer to inform them of any move in a timely fashion and provide them with information regarding the move, i.e. who is taking over the site (landlord/new owner/tenant), date of move, meter read. Don’t sweat this task, your account manager at Direct Power has over a decades’ worth of experience facilitating business moves.
Please note, many suppliers can take up to a month to process Change Of Tenancy’s, some require proof of the change such as a signed lease or similar. In order to ensure the process goes as smoothly as possible, contact Direct Power and ensure you have the below details to hand:
- Date of Move
- Supply Number
- Meter Reads – photos are preferable
- Site Address
- Address for final bill
- Contact details, name, tel. and e-mail for the incoming occupier, or landlord
We are here to help. Moving is stressful, coordinating your gas and electricity contracts need not be with input from Direct Power, so Contact Us today!