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Water Bills

16 posts by 13 users

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Brad T.

White Lake, Michigan

Oct 14 '13, 10:11 AM


Hello Everyone,

I am currently in the process of acquiring rental #4 and have been wondering about how everyone is handling water bills in single family homes. Do you pay the bill or does your tenant? If you do, do you include it in the rent or have them pay separately?

In my other rentals right now I pay the water bill, since I believe the city can put a lien on your house if the bill isn't paid.

Thanks,

Brad



Chris Adams

Residential Landlord from Leesburg, Indiana

Oct 14 '13, 10:18 AM


Unless its a lienable bill from the city, its up to the tenant. You don't want to be responsible for any utilities because in the event of a problem tenant they can put you in the poor house.

If the city can lien your property for the utility ( sewer for me) then you want to have it calculated into your holding cost of the property. My sewer bill is a fixed cost.

If it is not a fixed cost than you should have the tenant reimburse your for an amount over X, include X into the holding cost of the property.

Just make sure this is clearly stated in your lease.



Aaron Yates

Warren, Michigan

Oct 14 '13, 10:20 AM


@Brad T.

, As of this year, I have the water bills sent directly to me then charge the tenant for the water. This is working well for me. It also taught me that water bills are billed 2 months behind, at least in Warren anyways. So I am trying to figure out the best way to handle this when the tenant leaves.

I definitely will have to order a final reading whenever a tenant moves out. But in any case, I pay the water when I receive the bill so I know it's paid and then get it from the tenant. My first rental left me with a $300 water bill. That will never happen again.

Oh, also check with the city. Warren has a process that makes the tenant responsible and it doesn't get charged against the house. They require a 6 month deposit from the tenant for this. Still an option though.



Medium_new_logoresize2Aaron Yates, CKI Properties Group, LLC
Telephone: 586-799-3254
Website: http://www.ckiproperties.com


Dawn Anastasi Verified Moderator

Real Estate Investor from Milwaukee, Wisconsin

Oct 14 '13, 10:25 AM


I do what you do, @Brad T., meaning I pay the water bill because it can be lien'ed. I have not had an issue with tenants using too much water which I think is the major worry people have. Only on one single family is the tenant paying the water.



Website: http://www.coreprop.biz/
"If it makes dollars, it makes sense."


Chris Adams

Residential Landlord from Leesburg, Indiana

Oct 14 '13, 10:44 AM


@Aaron Yates I would think you should add an estimated cost of 2 months water bill to your security deposit. This is what gas/electric companies do to our tenants around here.

Its amazing how utilities are handled so differently across the nation.



Aaron Yates

Warren, Michigan

Oct 14 '13, 11:00 AM


Originally posted by @Chris Adams:
@Aaron Yates I would think you should add an estimated cost of 2 months water bill to your security deposit. This is what gas/electric companies do to our tenants around here.
Its amazing how utilities are handled so differently across the nation.

@Chris Adams

, not a bad idea. Or maybe include in the lease that a portion of the security deposit will be kept to pay the final bill and the balance and receipt will then be mailed to their new address. My rentals are in lower income neighborhoods and at $800 it's already a bit steep for them.



Medium_new_logoresize2Aaron Yates, CKI Properties Group, LLC
Telephone: 586-799-3254
Website: http://www.ckiproperties.com


Thomas Williamson

Multi-family Investor from atlanta , Georgia

Oct 14 '13, 11:13 AM


Wow I never thought about a lien, I guess because here in Georgia all utilities go in the tenants name, and they're responsible for all bills. The utility companies go after them if they don't pay and not the property. I would never put a utility in my name, but if I had to worry about the property having a lien, I think I would at that point as well. The things you learn on BP.



George P.

Real Estate Investor from ..., Michigan

Oct 14 '13, 12:45 PM


easy... i get a copy of the bill. the tenant gets a copy of the bill.

they auto draft the money from my account, the tenant adds the payment to their bill. the bill is on time and no issues.



Joel Owens Moderator

Commercial Real Estate Broker from Canton, Georgia

Oct 14 '13, 12:56 PM


In reference to what Thomas posted about water bills that is not 100% true for Georgia.

Each county in GA and city have their own water authority. Some are private companies and some are part of the government here.

Some more rural to suburban areas have one bill for all utilities. They also sometimes will require extra hefty utility deposits for out of town buyers versus locals.

In Fulton county for example water liens survive the foreclosure process and you have to negotiate with the Atlanta Watershed department and city attorney to get them down and released.

So with SFR yes typically there is a meter and the tenant gets it cut on and off. I have seen some cases where a water authority can lien a property. In multifamily as a landlord you can definitely get stuck with a bill.

What I would say is just because it works one way in one county or city in a state does not mean the practice Is universal. It is key to where the property is located that you want to purchase to call the local utility companies and see how they operate and what your exposure is if things go wrong.



Medium_allworldrealtyJoel Owens, All World Realty
E-Mail: [email protected]
Telephone: 678-779-2798
Website: http://www.AWcommercial.com
www.AWcommercial.com 678-779-2798 [email protected]


Bill S.

Real Estate Investor from Denver, Colorado

Oct 14 '13, 03:51 PM


While it is true that water bills are lienable here and there is risk associated with the tenant not paying, I have the tenants but the water in their name where they are the only people using the water (SFH). The local utility will email me a duplicate bill so if they get behind I know about it. I can pay for them and begin eviction for non-payment of rent since my lease allows me to use money received to cover bills and fees before crediting it to their rent account.

When you get more units, back billing is a huge headache. Takes time and money and more time for very little return.



David Krulac

Real Estate Investor from Mechanicsburg, Pennsylvania

Oct 14 '13, 04:49 PM


@Brad T.

All the the SFH that I rent out have a water company that is a private company, I think that they are the largest water company in the world and are from Germany.

In some areas around here the water co. is owned by the municipality. The difference is that if the water co. is municipal it can be leined by the government and they often have regulations that say the bill must go to the owner.

But fortunately for all of my SFH the water co is private, the tenants put the billing in their names and I have no responsibility and no possible property lien.



Johnny Flewellen

Real Estate Investor from Las Vegas, Nevada

Oct 14 '13, 04:56 PM


It really depends on the numbers at the end of the day more than a blanket situation of who pays what. If your cash-flowing your desired amount even when your paying the water bill you can use that to your advantage. In addition, I'm assuming you have an idea what other landlords in your area are charging.

So if they make their tenants pay the water, you can always point out to your tenants that the water bill is on you. As a result, they are less likely to move and you get long term tenants in return.



Michaela G.

Los Angeles, California

Oct 14 '13, 05:15 PM


The Georgia code does not allow the utility companies to lien a property. I've gone many rounds with the water company on different properties, where the tenant took off. They will lie right into your face and say that there's no such law - until you provide the law and advise them that they're willfully non-complying with the law and that I'll get my attorney involved. And they'll suddenly drop the charges.

§ 36-60-17. Water supplier's cut off of water to premises because of indebtedness of prior owner, occupant, or lessee prohibited; records required; limited liens for unpaid charges for water, gas, sewerage service, or electricity


(a) No public or private water supplier shall refuse to supply water to any single or multifamily residential property to which water has been furnished through the use of a separate water meter for each residential unit on application of the owner or new resident tenant of the premises because of the indebtedness of a prior owner, prior occupant, or prior lessee to the water supplier for water previously furnished to such premises.

(b) For each new or current account to supply water to any premises or property, the public or private water supplier shall maintain a record of identifying information on the user of the water service and shall seek reimbursement of unpaid charges for water service furnished initially from the person who incurred the charges.

(c) A public or private water supplier shall not impose a lien against real property to secure unpaid charges for water furnished unless the owner of such real property is the person who incurred the charges.

(d) A public or private supplier of gas, sewerage service, or electricity shall not impose a lien against real property to secure unpaid charges for gas, sewerage service, or electricity unless the owner of such real property is the person who incurred the charges.



Colleen F.

Multi-family Investor from Narragansett, Rhode Island

Oct 14 '13, 06:08 PM


In RI our lease says we can charge for excessive water use. We also can get the bill sent to the tenant but it has to stay in our name per the water company. It is a lien if they don't pay. It runs about $70.00 a quarter so I now just pay it and up the rent. I only once in 8 years had tenants that had double that use.



Roy N.

Real Estate Investor from Fredericton, New Brunswick

Oct 14 '13, 06:17 PM


We have a device we call a "utilities budget" which we use mostly with our student properties. If the tenant prefers to have a single payee for both rent and utilities, the "utilities budget" establishes an amount they pre-pay into the kitty each month. We hold the utilities in our name and pay them, but provide the tenant with copies of the bills {this enables them to monitor and regulate their usage}.

Every three months we reconcile the utilities budget and give the tenant the option of retaining any surplus in the budget (say for coming colder weather) or applying it to the next month's rent. If the total spent on utilities exceeds contributions, we invoice the tenant for the difference {this has only happened twice}.

In the instance of water and sewer, this allows us to ensure no lien is ever established, but to have the tenants pay for their use. In our multifamily properties, we have begun the {slow} process of sub-metering water to each unit.



Medium_greenapartmenthires-1024x1024Roy N., Louer Louer Ltd.
Telephone: 1.506.471.4126


Brad T.

White Lake, Michigan

Oct 15 '13, 09:23 AM


Thanks everyone. Wow, there are a lot of ways to handle such a simple item as the water bill!

I need to do some research in my area to see if most other rentals include water or if it is paid separately.

I like the idea of accountability for water usage with the bill in the tenant's name, but the lien on the house for non-payment still makes me nervous.



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