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Tenant not paying water bill

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Dan W

Central NJ, New Jersey

Sep 09 '09, 06:26 AM


Hi,

I have a tenant in a SFH in Philly who has not paid their water bill the last couple of months. The water is in my LLCs name (was advised that I should do that instead of having it in tenants name). What legal recourse do I have? I'd love to send a plumber over there and have the water shutoff from the street or have the water company do it themselves. However, I'd prefer to avoid a tenant lawsuit for violating their rights.

Thanks
Dan


Edited Jun 26 2010, 09:39


Ralph S.

Real Estate Investor from Sacramento, California

Sep 09 '09, 06:59 AM


Yea, constructive eviction is never a good idea.
Your only recourse I think is to serve a 5 day pay or quit. I assume you've got it in your lease/rental agreement that this tenant is to pay the water bill. Just like any violation of the contract, your recourse starts with a 5 day. You might check with the water municipality and find out their policies on how many months they let it lapse before placing a lien on the property, and/or shut it off.


Edited Jun 26 2010, 09:39


Jon Holdman Moderator

SFR Investor from Wheat Ridge, Colorado

Sep 09 '09, 07:39 AM


My lease states any money I receive first goes to late fees, then other charges like a water bill, then rent. So, if I had to pay the water bill, I would require the tenant pay me that amount with the next rent payment. I don't accept partial payments, so unless they pay the rent plus the water bill, the rent is late. Like Ralph says, the next step is to post a pay or quit and start the eviction process.


Edited Jun 26 2010, 09:39


Jon Holdman, Flying Phoenix LLC


Curt Davis Verified

Real Estate Investor from Memphis, Tennessee

Sep 09 '09, 09:46 AM


Dan,

Who advised you to put the water bill in your LLC's name? That is bad advice as far as Im concerned.

The previous advice is all good. You could only hope the city would shut the water off but that still leaves you holding the bag.


Edited Jun 26 2010, 09:39


Medium_buymemphisnow_stacksCurt Davis, Buy Memphis Now
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Dan W

Central NJ, New Jersey

Sep 09 '09, 10:27 AM


Aren't I holding the bag at the end of the day anyway? if I put the water in the tenant's name and they don't pay, the water company puts a lien on my property. My understanding is that this lien is attached to the property (basically me) and not the tenant, so in the end, I'm paying for it...


Edited Jun 26 2010, 09:39


Jon Holdman Moderator

SFR Investor from Wheat Ridge, Colorado

Sep 09 '09, 11:38 AM


Yep, that's the way it works here. But with proper wording in the lease you can turn an unpaid water bill into an eviction and get rid of them before they rack up an even bigger bill.


Edited Jun 26 2010, 09:39


Jon Holdman, Flying Phoenix LLC


Peter Giardini Donor

Real Estate Investor from Baltimore, Maryland

Sep 09 '09, 01:09 PM


In addition to Jon's approach which identifies how any payments are allocated, which by the way if your lease does not contain this provision it should, all of my leases indicate that the tenant is specifically responsible for paying the water/sewer bill and if they don't then they can be evicted.

In Baltimore if that statement is not in the lease then you cannot evict the tenant.

The details of how this is executed is this... the LLC that owns the property gets the water bill, the property manager pays the bill to ensure a lien is not placed against the property and then the tenant receives a copy of the water bill to pay immediately.

No pay... No stay!


Edited Jun 26 2010, 09:39


Wayne Qualls

Commercial Real Estate Broker from Birmingham, Alabama

Sep 09 '09, 10:47 PM


To All,

I had several houses at one time, and all the utilities the tenents had to put in their names. Well the tenents figured that out quick enough. The water and sewer bill here in Birmingham is on the same bill. They figured out if you only paid the water bill and not the sewer bill, they would not cut the water off. So guess what happens? thats right when I went to sell all my properties EVERY ONE OF THEM HAD SEWER LIENS.

I even had one house that they did not pay water bill, water meter was removed by the water company, so they went and stole a meter from some were and installed it. Oh yes, this property also had a sewer lien attached also.

Sometimes you just can't win for losing.

Wayne


Edited Jun 26 2010, 09:39 by Wayne Qualls


Peter Giardini Donor

Real Estate Investor from Baltimore, Maryland

Sep 09 '09, 11:32 PM


Ouch...

This business is always willing to teach lessons isn't it?

I hope everything worked out?


Edited Jun 26 2010, 09:40


Ralph S.

Real Estate Investor from Sacramento, California

Sep 09 '09, 11:32 PM


Boy, lots of good lessons here. Personally, I've always included water in the rent and paid the water bill myself, but I've not rented SFR, only duplexes and multi-fam where the single bill includes multiple units. In this case, however, where the tenant doesn't have the direct consequences of not paying (like electric/gas or phone/cable) and the consequences are a lien on the property and not a collection against the tenant, the LL/owner just has to pay, whether they bill the tenant or include it in the rent. Trusting the tenant is just not good risk management.


Edited Jun 26 2010, 09:40


Joshua Dorkin Verified Donor

BiggerPockets Founder from Denver, Colorado

Sep 09 '09, 11:36 PM


That's serious, Wayne! Are these all low-income properties in Birmingham?


Edited Jun 26 2010, 09:40


Medium_bp-squareJoshua Dorkin, BiggerPockets
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Wayne Qualls

Commercial Real Estate Broker from Birmingham, Alabama

Sep 09 '09, 11:55 PM


Joshua,

Yes, they were all Section 8 homes that I had.

Peter,

I had to pay all the sewer liens, so I went to the Housing Authority to see if could get any recourse, and to no avail NO!! I could not.

Wayne


Edited Jun 26 2010, 09:40


Jon Holdman Moderator

SFR Investor from Wheat Ridge, Colorado

Sep 09 '09, 11:58 PM


All the utilities I've dealt with have some sort of landlord notification process where they notify me if the bill is late.

I've considered Ralph's approach. It seems like more work to pay the bill then collect from the tenant, but I'm beginning to think that's less work than hounding the tenant about a late bill.


Edited Jun 26 2010, 09:40


Jon Holdman, Flying Phoenix LLC


Joshua Dorkin Verified Donor

BiggerPockets Founder from Denver, Colorado

Sep 10 '09, 12:00 AM
2 votes


Wayne -
I'm assuming that you reported these tenants to Section 8 and got their asses booted from the program . . .


Edited Jun 26 2010, 09:40


Medium_bp-squareJoshua Dorkin, BiggerPockets
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Wayne Qualls

Commercial Real Estate Broker from Birmingham, Alabama

Sep 10 '09, 12:04 AM


Joshua,

Yes I did, and I was told that if they did not pay me they would be removed from the program. I'm still waiting on my money (HA HA).

Wayne


Edited Jun 26 2010, 09:40


Joshua Dorkin Verified Donor

BiggerPockets Founder from Denver, Colorado

Sep 10 '09, 12:06 AM
1 vote


That is one way to get paid, BTW. When I ran section 8 property, I'd always remind the tenants that if they messed up, I'd quickly report them and have them removed from the program. While I certainly had my share of problems, paying their (my) bills was not one of them.


Edited Jun 26 2010, 09:40


Medium_bp-squareJoshua Dorkin, BiggerPockets
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Michael Rossi

Real Estate Investor from Ohio

Sep 10 '09, 08:32 AM
1 vote


I am NOT paying my tenant's water bills; their electric bills; their gas bills; for their big screen tv - NADA. They are resonsible for their bills and I am responsible for mine! If they are renting a SFH from me, they are paying all the utilities directly. If they don't pay, the water company can shut off the water and then I'll call the code enforcement department and have them thrown out because the house isn't habitable without water!

Furthermore, the city is NOT putting a lien on my property for some DEADBEAT SCUMBAG'S irresponsibility.

It is high time that landlords stand up and FIGHT this tyranny. In my area, landlords are currently involved in aggressive legal proceedings against the government over this issue. I encourage each of you to grow a backbone and start FIGHTING! Organize the landlords in your area and get a good lawyer. If you don't make a stand, the government will be back looking for more money on a regular basis. Weak landlords do not survive in this business!

IT'S TIME TO STAND UP AND FIGHT!

Mike


Edited Jun 26 2010, 09:40


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