Author Topic: Advice on a tenant not paying their own utilities  (Read 6380 times)

redrocker

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Advice on a tenant not paying their own utilities
« on: September 12, 2016, 02:36:16 PM »
Wanted to get the opinion of more experienced landlords on how to deal with a specific tenant situation.
I had a tenant sign a lease in June about 2 weeks before I was going to be out of town for nearly 3 months. Terms of the lease included that she would switch power and water to her name and pay the bills. While she has been relatively accommodating as tenants go (there were a few odds and ends of maintenance work that I completed in the first few days after she moved in), I had to remind her several times to switch the utilities to her name before I left. There was a variety of excuses each time we talked about this: she had one day off a week and was busy moving in, or she was sick and was too weak to get out and about, or one of the utility companies had her on hold for "over an hour." Seemed like some warning flags were popping up but I was a bit desperate to have this rental unit filled before I was out of town (rental income is my primary revenue stream at the moment) otherwise I might have taken a harder stance and suggested I just get another tenant. I just didn't have time for that and I much prefer to reason with tenants than get confrontational.

Literally a day before I left town I called the energy company to check the status and they said she'd transferred power to her name. Being in Louisiana with our renowned summer heat, I was primarily concerned about that bill not coming to me so I didn't pursue the water bill, assuming 1) that she was in the process of transferring it, and 2) being gone all summer without paying the bill they'd probably cut the water which would force her hand. From my own experience, I know that our local water board is a royal pain (not dissimilar from going to a poorly run DMV) so I did understand that she would probably need to dedicate a whole morning to get the water transferred and that can be tricky for service industry workers.

I got back in town this week to discover that she hasn't transferred water to her name, and I'm just accruing a bill of my own. Seems like I'm going to have to abandon the reasoning approach and this is where I was hoping for suggestions. The options I can think of are:

1) I could just call the water board and cut the water off. Which seems antagonistic. Maybe.
2) I could tell her her she has a short interval of time remaining to transfer and then I'll cut it off.
3) I could just let it stand as it is and deduct from her security deposit, which doesn't leave me any leverage if something else goes wrong.

2) seems the best approach but I feel like it's still essentially enabling irresponsible behavior and possibly encouraging future nonsense. I feel like I've been lenient, probably too lenient and that may have been what led to this in the first place.

Whether it should matter or not, she's in her 40's, 10 years older than me, and likely living paycheck to paycheck. However this gets resolved, I intend to deduct the 3 months of water that I've paid so far from her security deposit without telling her until after she departs. I feel like if I demand payment for that upfront it could be a hardship for her and if she knows she has less of a deposit coming back that means less leverage for me whenever she leaves. Any suggestions on how to proceed while maintaining speaking terms with my tenant?

Miss Piggy

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Re: Advice on a tenant not paying their own utilities
« Reply #1 on: September 12, 2016, 03:52:23 PM »
#2 seems like a fair option. Perhaps a "two week notice" is reasonable since it's going to be such a hassle? Then again, if she'll just wait until the last day regardless of length of time/notice, then maybe a week is fine.

ender

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Re: Advice on a tenant not paying their own utilities
« Reply #2 on: September 12, 2016, 03:56:41 PM »
What does your lease say about how long tenants have to transfer utilities into their name?

redrocker

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Re: Advice on a tenant not paying their own utilities
« Reply #3 on: September 12, 2016, 04:25:10 PM »
What does your lease say about how long tenants have to transfer utilities into their name?

The current language doesn't specify a time frame, just that the tenant will transfer utilities to their name. That will definitely be corrected at future lease signings.

NoNonsenseLandlord

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Re: Advice on a tenant not paying their own utilities
« Reply #4 on: September 12, 2016, 04:33:10 PM »
Do not shut the water off.  Do you want them to use the tub as a toilet?

Shut the electricity or gas off, not the water.  And never let a tenant pay water, as it generally attaches to the property when they do not pay.  You have to check the water bill just like you check rent wen the tenant pays.

Jack

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Re: Advice on a tenant not paying their own utilities
« Reply #5 on: September 12, 2016, 04:58:37 PM »
IANAL[andlord], but I think it would be reasonable to start sending the tenant invoices each month for the utilities you had to pay on her behalf. I agree with NoNonsenseLandlord that leaving the water in your name is probably the best way to go anyway.

For future tenants, I'd suggest either including utilities (e.g. water) and raising the rent accordingly, or make sure to transfer the utilities (or at least cancel them in your name) before move-in.

cchrissyy

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Re: Advice on a tenant not paying their own utilities
« Reply #6 on: September 12, 2016, 05:01:13 PM »
How about calling the water people (like, now) and scheduling it to shut it off at the end of the month. Then you tell her. She has plenty of time and will probably take it more seriously when she knows it will shut off.

Or, you could bill her for it. Send her an email asking for the time you have already wrongly had to cover the bill, and ask if she prefers doing it "this way" instead of setting it up in her own name. then, every 3 months or whatever, you tell her the new total.

I know step 2 is hassle, but it might be more agreeable to her, and you'd always know it was paid, if the previous poster is right about water service being more for the property owner anyway.  Where I am, garbage service works that way (only owners can have accounts) but I have had water accounts in all my roles as homeowner, landlord, and renter.

redrocker

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Re: Advice on a tenant not paying their own utilities
« Reply #7 on: September 12, 2016, 05:02:58 PM »
I'd suggest either including utilities (e.g. water)

My apprehension with that is that when something's included, it may be perceived as "free" and then tenants aren't responsible with their usage. Then there's a lot more car washing and inflatable pool fillings...

Jack

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Re: Advice on a tenant not paying their own utilities
« Reply #8 on: September 12, 2016, 05:29:23 PM »
I'd suggest either including utilities (e.g. water)

My apprehension with that is that when something's included, it may be perceived as "free" and then tenants aren't responsible with their usage. Then there's a lot more car washing and inflatable pool fillings...

Next time, try reading the whole post before replying because you omitted from the quote the most important part of what I said:

...and raising the rent accordingly...

You assume they're going to be wasteful, so you bill their irresponsible ass for that worst case. If they don't like it, then they'll be the ones begging you to let them get the utilities transferred ASAP instead of the other way around.

ender

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Re: Advice on a tenant not paying their own utilities
« Reply #9 on: September 12, 2016, 05:45:58 PM »
How about calling the water people (like, now) and scheduling it to shut it off at the end of the month. Then you tell her. She has plenty of time and will probably take it more seriously when she knows it will shut off.

Or, you could bill her for it. Send her an email asking for the time you have already wrongly had to cover the bill, and ask if she prefers doing it "this way" instead of setting it up in her own name. then, every 3 months or whatever, you tell her the new total.

I know step 2 is hassle, but it might be more agreeable to her, and you'd always know it was paid, if the previous poster is right about water service being more for the property owner anyway.  Where I am, garbage service works that way (only owners can have accounts) but I have had water accounts in all my roles as homeowner, landlord, and renter.

I'm not really sure most people giving advice here are giving good advice.

Turning utilities off on a tenant (water, in particular) is likely to not end well for the landlord in many legal areas. I would tread with caution before threatening something like that, particularly when the lease is ambiguous.

cchrissyy

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Re: Advice on a tenant not paying their own utilities
« Reply #10 on: September 12, 2016, 06:47:04 PM »
the lease is ambiguous?

The OP said according to the lease the tenant will pay water and put it in their name.

ender

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Re: Advice on a tenant not paying their own utilities
« Reply #11 on: September 12, 2016, 06:51:32 PM »
the lease is ambiguous?

The OP said according to the lease the tenant will pay water and put it in their name.

... by when?


TheOldestYoungMan

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Re: Advice on a tenant not paying their own utilities
« Reply #12 on: September 13, 2016, 12:04:30 PM »
The passive aggressive approach is to just have the water turned off and when the tenant asks say "Yea, I said to get it put in your name.  Nobody was paying for it so they shut it off."  That would fit with the narrative you've already given the tenant I think.  There's no need to turn it into an additional social transaction if you're worried about that.  As someone who often forgets about certain things when I move into a new place, I can tell you that I wouldn't question that narrative at all.  I'd go to turn on the sink, realize the water was off, remember being told to get it put in my name, and then feel shame at my irresponsibility.

For what others have said, I wouldn't do that.  It's probably a real good way to get human shit on your ceiling.

I just bought my first rental house, and I go back and forth on utilities.  Specifically around here, I know the gas company sucks at transferring service.  Their "new service" guys are not nearly as backed up as their "terminate service" guys and so the new service guy comes out right away, sees the gas is on, and says, sweet!  Then three weeks later the terminate service guy comes out and shuts off the gas.  It's two separate systems that don't talk to each other, because that's what happens when there's no competition, broken processes stay broken.  This has happened to me and everyone I know every time.  It's always..."I think my hot water heater is broken, I had a cold shower this morning."  And then a few days later "You'll never guess what the silly gas company did."

So for gas, water, trash, and the like, I think pick a conservative amount and build it into the rent.  To handle the "wastefulness of the free" you could offer some sort of rebate or credit if they use it responsibly (define that carefully though).

For electricity (along the gulf coast anyway, because A/C can go nuts) I think tenant pays.  I've seen thousand dollar electric bills if people don't manage the thermostat in the summer.

Cable/internet would be another tenant one.  I can argue for this to be a landlord thing, but it's a weak argument.  I'd rather repair the damage the installer does to the house then mess with trying to return boxes/modems.

Landscaping I think I'll pay, because it is something I enjoy doing so I'll just do it myself.  This one will probably be a conversation with the tenant though.  I can imagine the appeal of renting a house might be getting to putter around in the yard.  All kinds of folks.

I'm not sure how legit it is to withhold something like the water bill from the security deposit unless the lease specifically calls out water as a tenant responsibility.  The more legit way to do that would be to deduct water from the rent paid and treat it like late rent.  That probably is going to vary by state so check your local rules.  I was very surprised about what is, and what is not, a valid security deposit item.

With This Herring

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Re: Advice on a tenant not paying their own utilities
« Reply #13 on: September 13, 2016, 02:19:49 PM »
Does your lease specifically say "power and water," or does it say "utilities"?  I'm just curious, as the two apartments I've had in NYS have had water and trash collection as landlord-paid items, while electric, gas, heat, hot water, internet, cable, and phone are tenant-paid unless the lease specifically states that the landlord will cover one or more of these costs.  I often see apartments that may include heat or may include heating the water, but I haven't seen one advertised where the tenant pays for water.  Is this a regional thing?

redrocker

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Re: Advice on a tenant not paying their own utilities
« Reply #14 on: September 13, 2016, 02:44:50 PM »
Does your lease specifically say "power and water," or does it say "utilities"? 

Immediately after listing which appliances are included, under description of the premises I have written:
"Rental of the premises also includes: n/a - all utilities to be paid by tenant"

Under a different section it says:
"Utilities paid by Landlord include: n/a - all utilities to be paid by the tenant"

That may seem odd to have it worded that way but I have a few houses and the situation is different depending on the apartment.

I often see apartments that may include heat or may include heating the water, but I haven't seen one advertised where the tenant pays for water.  Is this a regional thing?

I rented previously in this city for 3 years before buying a house, all three place I lived I had to pay water and trash pickup (it's on the same bill). The only exception I know of in this city where landlords don't have their tenant pay water is when they only have one meter for a property with multiple apartments. It's pretty standard here. Considering the combined monthly bill of water/trash is usually at least $70 per apartment, it's not a negligible expense.

I'm not sure how legit it is to withhold something like the water bill from the security deposit unless the lease specifically calls out water as a tenant responsibility.  The more legit way to do that would be to deduct water from the rent paid and treat it like late rent.  That probably is going to vary by state so check your local rules.  I was very surprised about what is, and what is not, a valid security deposit item.

That's a legitimate concern. I'm glad I asked before proceeding because it's apparent that I've flubbed a bit by not specifying an amount of time required to transfer utilities and not explicitly saying that utilities includes power and water. I'll tread a little lighter than I'd initially thought. Thanks.

I've decided to contact by email so our correspondence is written. Not my preferred way to do things but I guess it's time to start a paper trail on this one.
« Last Edit: September 13, 2016, 03:08:51 PM by redrocker »

GizmoTX

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Re: Advice on a tenant not paying their own utilities
« Reply #15 on: September 13, 2016, 02:57:53 PM »
DS has rented 3 different apartments while at university, & all 3 charge for water & trash pickup (outside the door!) in addition to monthly rent. Since these are assessed after the rent is due, the final water & trash payment comes out of his security deposit. He was/is responsible for arranging & paying electric, cable (internet), renters insurance, & phone (he uses his cellphone instead of a landline). Apartment management assesses a (high) daily electric fee if they pay it, as they don't want the apartment without AC or heat.

Ensign1999

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Re: Advice on a tenant not paying their own utilities
« Reply #16 on: September 14, 2016, 07:48:27 AM »

I've decided to contact by email so our correspondence is written. Not my preferred way to do things but I guess it's time to start a paper trail on this one.


This is a good step...but they can always say they did not receive it.  If they reply to your email, you are good, but if you don't hear anything, then it could be difficult to prove they received the email.  At that point if you need to build a paper trail then you would need to start using certified mail or some other means you can prove.  Hopefully it doesn't go down this road at all.  The best for both parties is to talk it out and get it settled.  If that doesn't work, then you can consider some of your other options.

redrocker

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Re: Advice on a tenant not paying their own utilities
« Reply #17 on: September 14, 2016, 08:40:43 PM »

I've decided to contact by email so our correspondence is written. Not my preferred way to do things but I guess it's time to start a paper trail on this one.


This is a good step...but they can always say they did not receive it.  If they reply to your email, you are good, but if you don't hear anything, then it could be difficult to prove they received the email.

Ah well, no response to the email over 24hrs, so I texted. Response: "I missed that on the signing. WIth the amount of rent I thought that was included."

There were at least 2 exchanges in person where I reminded her that power and water needed to be changed over. One of those times, she was reading each line of the lease in my presence before signing, asking questions as they came up so I feel like she's playing dumb to test me. The most of a compromise I'm going to offer is that I'll keep it in my name if she doesn't want to change it over but I want her to pay.

Lmoot

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Re: Advice on a tenant not paying their own utilities
« Reply #18 on: September 15, 2016, 04:52:25 AM »
She is definitely playing dumb. And that's a bad sign because she might not doing it for your benefit. There is a chance she may try to fight you on this and is trying to set things up as if the lease language was open-ended, changed, or deceitful.

I'm sorry, but I have rarely heard, if ever (except maybe in a room-lease situation), where power utilities are not covered by the renter, or at the minimum, shared. This chick is bold.

BlueHouse

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Re: Advice on a tenant not paying their own utilities
« Reply #19 on: September 15, 2016, 05:20:51 AM »

I've decided to contact by email so our correspondence is written. Not my preferred way to do things but I guess it's time to start a paper trail on this one.


This is a good step...but they can always say they did not receive it.  If they reply to your email, you are good, but if you don't hear anything, then it could be difficult to prove they received the email.

Ah well, no response to the email over 24hrs, so I texted. Response: "I missed that on the signing. WIth the amount of rent I thought that was included."

There were at least 2 exchanges in person where I reminded her that power and water needed to be changed over. One of those times, she was reading each line of the lease in my presence before signing, asking questions as they came up so I feel like she's playing dumb to test me. The most of a compromise I'm going to offer is that I'll keep it in my name if she doesn't want to change it over but I want her to pay.
I hope you respond "nope, it's always been included (per your lease) and we have discussed this previously on X occasions.  i thought from previous discussion that you had started the process when I was leaving town for X months, so it's a bit of a shocker to return and find it has not been done. I'm trying to clean up the losse ends now, so please let me know the date this will be complete.  If preferred, we can adjust the rent upwards to include the utility bill, just let me know by ---"

andy85

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Re: Advice on a tenant not paying their own utilities
« Reply #20 on: September 15, 2016, 06:22:01 AM »
i work for an electric/gas utilities company.

I would:
* always leave the water in your name
* tell the tenant they need to have the electric/gas transferred to their name within 5 business days of the move-in or it will be shut off
* call the electric/gas company and have the services scheduled to come out of your name 6 days after the date of the tenant's move-in

radram

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Re: Advice on a tenant not paying their own utilities
« Reply #21 on: September 15, 2016, 07:21:02 AM »
If her budget is so tight that she can not afford the water bill, then any delay in forcing her to pay is only delaying the inevitable.  This little bill is a warning sign of bigger problems to come.

I consider our rental property to not only be a financial contract, but a mutual interest in a property I happen to own.  I need my tenants to treat the property with respect and to let me know when something is wrong so I can address it quickly.  It protects their property as well as mine. You do not have this relationship with this tenant and most likely never will.

It is a problem that you waited so long, but I believe you should act quickly now to get her to live up to the contract she signed. She might fight you, but I would rather that fight occur now over $200 rather than later over possibly thousands.  I would NOT threaten to shut off the water, as your delay in addressing her neglect might cause problems for you later.

Your contract is clear regarding who pays, but non-specific in time frame to switch billing info.  Non-payment of a past due bill is valid reason to move forward with getting her to pay or leave.  Not transferring into her name might not be.  I would focus more on the past due bill and work on correcting the contract language for future contracts.  Raise the rent and include water, raise it more than the average cost, and stipulate that you reserve the right to bill the tenant for a realistic percentage above median usage in your area (beyond 20% above, for example). Your water company should be able to tell you median usage.

On a more important note OP, why is Fonzie wearing an eye-patch?

Keep us posted.

redrocker

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Re: Advice on a tenant not paying their own utilities
« Reply #22 on: September 15, 2016, 08:09:45 AM »
I would:
* always leave the water in your name

Seems like a growing chorus on this point. Another reason I'm hesitant to do so and increase the rent to compensate is that it seems the majority of rentals in the city have their tenants paying their own water balls. So if I'm pricing water into mine  when I list the space as vacant, I believe I'm losing some potential tenants when they simply compare prices. My rental is priced on the high side for my neighborhood as it is (although it's also got some features that more than make up for it).

I know as a former renter that the amount of the water bill can be a bit of a surprise in this city and I think most renters here are focused on what the electric bill is going to be (I don't think a potential tenant has ever asked me what the average water bill is but most ask what the average power bill is). Once a tenant is settling in, I suspect the water bill falls within the noise (considering what anti-Mustachians pay for cable, cell phone, etc) but when making the decision to sign including it in the rent could make my place look less appealing than others that don't.

It is a problem that you waited so long, but I believe you should act quickly now to get her to live up to the contract she signed. She might fight you, but I would rather that fight occur now over $200 rather than later over possibly thousands.  I would NOT threaten to shut off the water, as your delay in addressing her neglect might cause problems for you later.

At the risk of appearing soft, I suggested that if she complete the transfer to her name within a week of today that I'd pay June-Aug water bills. She says she'll do it. It remains to be seen. After thinking about it, I admitted to myself that if she'd tried to negotiate lower rent before signing the lease to account for her paying the water bill that I'd probably have worked with her. I think my offer here - while after the fact - still is something of a compromise and incentivizes her to get off her butt and take care of this.

On a more important note OP, why is Fonzie wearing an eye-patch?

That's not the Fonz, that's Barry Zuckerkorn. Heard of him? He's very good.
« Last Edit: September 15, 2016, 08:12:54 AM by redrocker »

radram

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Re: Advice on a tenant not paying their own utilities
« Reply #23 on: September 15, 2016, 09:07:12 AM »

.

On a more important note OP, why is Fonzie wearing an eye-patch?

That's not the Fonz, that's Barry Zuckerkorn. Heard of him? He's very good.

Now that I zoomed in, I see that he is winking.  I recognize him now :)

FIFoFum

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Re: Advice on a tenant not paying their own utilities
« Reply #24 on: September 15, 2016, 10:01:14 AM »
I also vote for keeping water in your own name and just figuring out your price point around that.

As someone who has owned, been a landlord, and has rented as a tenant in multiple cities (and currently rents): water just has a way of being a PITA. Starting and stopping electric and gas has been smooth and easy to pinpoint to a specific date in almost every place. That hasn't been my experience for water service.

Hotstreak

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Re: Advice on a tenant not paying their own utilities
« Reply #25 on: September 15, 2016, 10:15:28 AM »
I can comment on this from the renter side of things.  My roommate and I decided to split bills, and he was in charge of gas/electric/water/trash/utilities (yes, 5 different bills).  He didn't set them up in his name, so the landlord called & billed us until he finally got them changed over.  It was a huge hassle.  Calling three different government agencies to set up each water, trash, and utilities was a nightmare to work through.  They told us "utilities", but we were new in the area and didn't know there were actually three separate bills.  I think one billed quarterly and the other two monthly.  Total for all three was under $50/mo, and water is so cheap here that it couldn't have gone up much.  Other landlords I know in the area include these in their rent, for good reason.  It's not worth having to follow up with each tenant, since many have the same issues we did.

That being said, I would think that if it's just two bills (electric and water) your tenant should not have a problem setting them up.  I would require them to change the bills to their name "immediately", and let them know this is something that needs to be done in the first few days.  I suggest you create a form that lists the name of each company with their phone #'s, as well as the property address and whatever else a tenant would need to know to set up the bill.  Make it easy for them (and this also makes it blindingly obvious that they need to set these bills up).  If my old landlord had given us such a sheet, we would have had the bills changed in no time.  I think it would take 5 minutes to create that form, and you could use it for many years.

fishnfool

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Re: Advice on a tenant not paying their own utilities
« Reply #26 on: September 15, 2016, 10:44:16 AM »
I pay the water bill on my rental and it is a great way to monitor the tenants. Example; I found out recently that a tenant has 3 kids coming to stay every weekend, that along with a new infant has doubled the water bill. I'm considering a rent increase to cover the extra expense. Normally I wouldn't be too concerned, I love kids, but it's costing me a bundle and that's not even taking into account the extra wear and tear!

slowsynapse

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Re: Advice on a tenant not paying their own utilities
« Reply #27 on: September 15, 2016, 10:45:07 AM »

.

On a more important note OP, why is Fonzie wearing an eye-patch?

That's not the Fonz, that's Barry Zuckerkorn. Heard of him? He's very good.



Now that I zoomed in, I see that he is winking.  I recognize him now :)

An important point, if not a little off topic, but if you need to use a lawyer in this situation, best to steer clear of Zuckerkorn.  Bob Loblaw might be a better choice.

Stachetastic

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Re: Advice on a tenant not paying their own utilities
« Reply #28 on: September 16, 2016, 06:27:26 AM »
I ran into this issue several years ago regarding the electric bill. I was already fed up with the tenant and ready for them to move on, so I called the electric company (after several warnings to tenant) and requested a shut off. The company said they cannot shut it off, but they took it out of my name. I asked who would be billed for usage--they said "No worries, it won't be you." I asked if they were in the business of providing free electric, and they said it likely won't ever get paid, and they're ok with that. The rep then went on to say that many tenants will mess with the outside meter in an attempt to turn service back n themselves, resulting in damage to my property and possible damage to themselves in the process. 

Regarding paying water, I had a duplex that I paid the water for, as both units were on one meter. The bills for that property ranged from $30-160. It was crazy, and nearly impossible to budget into the rent. We are now converting it to a single family home, and I hope to never pay water bills for tenants again. In our town, the trash pickup is assessed on taxes if not paid, but the water bill is on the tenant. YMMV

bpleshek

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Re: Advice on a tenant not paying their own utilities
« Reply #29 on: September 16, 2016, 03:10:00 PM »
In some areas turning off the utilities can get you in trouble.  That being said, in my lease, I state that the water and electric are going to be cut off on the move-in date.  So they have to put it in or not have access to it as they move in which is inconvenient for them.  I make sure that they know that and have even once just gone with them to do it because they didn't have any idea what to do.  I'd rather do it "before" they get in there rather than make it look like a punitive action by a landlord.  I keep calling the utilities for the last 3 days before the move in date and will send a reminder text or two.

I didn't want to include water because of my belief that they would think it was "free" and take 2 hour showers every day.  Also, if they're not paying for the water, they have no reason to report any water leaks that aren't dripping into the floor.  I might not know that 5 gallons per hour is going down the drain because of a constantly running toilet or shower.  If they're paying for it, you can believe I'll get a call and get the stuff fixed right up.

On the other hand, I do trust the opinion of our friend, NoNonsenseLandlord, so I might have to reconsider that position.  At least to give it a thought.

Brian

clarkfan1979

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Re: Advice on a tenant not paying their own utilities
« Reply #30 on: September 17, 2016, 07:25:01 PM »
I have never paid utilities for my units. However, every summer I have to remind the tenants to cancel their power and water bill, so the new tenant can establish their new account.

The water and power companies do not shut anything off. They typically have a some sort of grace period in which the old person cancels and the new person sets up their new account. If the new person never calls, then the power and water companies will shut it off. However, they are the one's shutting it off, not you. You are simply cancelling your account because you no longer live there.

Hotstreak

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Re: Advice on a tenant not paying their own utilities
« Reply #31 on: September 17, 2016, 09:39:41 PM »

I didn't want to include water because of my belief that they would think it was "free" and take 2 hour showers every day.  Also, if they're not paying for the water, they have no reason to report any water leaks that aren't dripping into the floor.  I might not know that 5 gallons per hour is going down the drain because of a constantly running toilet or shower.  If they're paying for it, you can believe I'll get a call and get the stuff fixed right up.



It seems like the risk only matters if you have a small number of rentals.  To compare, the owner of a 16-plex will almost certainly be paying water for all tenants.  Some will use excess water, some will use very little, but overall usage for the building will be normal or within some standard deviation or normal.  That consistency makes it simple to budget for and set rents accordingly.  If you have only one rental, that one tenant can use $200 worth of water instead of $50, and that blows your cash flow out of the water.  That's a situation that needs to be mitigated (and is probably worth the hassle of hand-holding your tenants through setting up their bill).

frugalcoconut

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Re: Advice on a tenant not paying their own utilities
« Reply #32 on: September 19, 2016, 07:23:02 PM »
At one of my rentals, water is not included in the HOA.  When I initially lived there and then later when I rented it out to a friend of mine (Tenant # 1), I kept the water in my name but it was my least favorite bill because I had to pay it manually ever month -- there was no automatic debit option.  I would frequently forget and I just didn't want to deal with the hassle.  When it came time for Tenant # 2, I happily looked into handing off the responsibility.  It turns out that the city utilities department wanted a $300+ deposit (which Tenant # 2 reluctantly paid), a copy of the lease, photo ID (of the tenant), a copy of my business license / rental permit, a special form signed by me as the landlord, and a couple of other miscellaneous items that I cannot recall at the moment.  This was the last thing that Tenant # 2 did prior to move-in (since it was the most cumbersome) and Tenant # 2 sent me a picture of the payment receipt as confirmation. 

bpleshek

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Re: Advice on a tenant not paying their own utilities
« Reply #33 on: September 21, 2016, 09:07:48 AM »
@Hotstreak At this time I only rent SFHs.  I am not sure I want to get into the multi-plex properties.  While they're probably more profitable, it is my completely uninformed guess that turnover would be higher and rents lower(each, but probably more over all) so that is a different clientele than I'm trying to cultivate.  I'm in a low cost of living area in Ohio, so my 1200-1400/month rents are good amounts.  In my area, multi-unit rents are in the 500-800 range.  So, my prices are 70-100% more than many renters will pay.  That being said, since each property exists separately, any single tenant can ruin my cash flow on that property(not completely because they're all paid in cash).

@frugalcoconut I know that it was a pain for you to pay, but for all that hassle, I might just have kept it in my name and charged accordingly.  LOL.

Brian

Evie

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Re: Advice on a tenant not paying their own utilities
« Reply #34 on: September 22, 2016, 11:44:34 AM »
In some states shutting off water can create a habitability issue--so I would tread with caution. I like the idea of telling her she needs to transfer water into her name within the week, and send her a bill for the past few months of water usage.  Let her know she is in violation of her lease if she does not do this. If your lease is written right, you should be able to issue a notice to perform or quit.

redrocker

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Re: Advice on a tenant not paying their own utilities
« Reply #35 on: September 22, 2016, 04:11:51 PM »
So just to update, my tenant accepted my offer to transfer the bill to her name within a week and completed that transfer yesterday. Yay.

Lessons learned: explicitly list on the lease the name of the utilities instead of just saying "utilities" and provide an explicit timeline for that transfer.