Gas bill

I own a small building with 5 units and I pay all the utilities except electricity. The gas bill increased over the winter but doubled for the month of February. I suspect some of the tenants (I had some problems with them before) kept the heat up just to increse the bill.

I didn't have the building last winter so I don't have any data to compare this year's bills with.

I want to tell them but I don't really know how and it is something that can't be proved.

Is there a way to give them a warning (to all units) within the legal limits and also something they would care about? Like raising their rent?

It is very frustrating and they know there is nothing I can do about it. Or I'm being really paranoid which is also scary.

Thank you

Edited: 06/26/2010 at 11:57AM

Michael Rossi

Real Estate Investor · Ohio

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Mar 07 '10, 07:04 AM

NEVER BUY A BUILDING THAT REQUIRES YOU TO PAY THE UTILITIES!!!

Edited: 06/26/2010 at 11:57AM

Michael Rossi

Real Estate Investor · Ohio

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Mar 07 '10, 07:06 AM

I'm not sure that I was clear in my last post. I would like to clarify:

NEVER BUY A BUILDING THAT REQUIRES YOU TO PAY THE UTILITIES!!!

Edited: 06/26/2010 at 11:57AM

Julia J

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Mar 07 '10, 07:10 AM

OK.

How about an apt. in apartment buildings? I remember when we used to rent the utilities (electricity + water) were included.

Because I was thinking about something like that next.

Thanks

Edited: 06/26/2010 at 11:57AM

Julia J

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Mar 07 '10, 07:11 AM

Yeah...I think you were pretty clear!!! You are funny!

Edited: 06/26/2010 at 11:57AM

Michael Rossi

Real Estate Investor · Ohio

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Mar 07 '10, 07:14 AM

OK, maybe my last post wasn't as helpful as it could have been. Here are 2 points:

1. Tenants couldn't care less how much gas they use IF THEY AREN'T PAYING THE BILL! I can drive all over my town on the coldest day of winter and tell you EXACTLY which landlords pay the heat - because the windows will be open.

2. If you do ANYTHING to make the tenants mad, they'll turn the heat up to 90 degrees and open the windows! Why not? THEY AREN'T PAYING THE HEAT!!!

NEVER BUY A BUILDING THAT REQUIRES YOU TO PAY THE UTILITIES!!!

Edited: 06/26/2010 at 11:57AM

Julia J

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Mar 07 '10, 07:15 AM

But I didn't see any building that has the utilities separate for each apartment...

Thank you, appreciate your advise

Edited: 06/26/2010 at 11:57AM

Bill Gulley

Real Estate Investor · Springfield, Missouri

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Mar 07 '10, 07:16 AM

Hi, I agree with Mike, but since you already hav it, you should have an escallation clause for utilities. You use at least the last year say up to three years as an average basis. Any amounts above that constitute an additional fee which becomes part of the rent then due. All states have utility commissions. Some have very strict laws/regulations about charging for utilities, someplaces it can have you being defined as a utility provider and you absolutely don't want that title! So, if you make an allocation to the amount of utilities to be considered as rents and additional usage constitutes additional rents. Check for the applicability of this issue in your state. Otherwise, they will crank it up on you and you get to pay it over ther term of the lease. Good luck, Bill

Edited: 06/26/2010 at 11:57AM

Julia J

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Mar 07 '10, 07:18 AM

Yes, I know exactly what you are saying this is what I was saying too.

Just wondering if I can do anything to fix besides selling it (which I'm considering anyway).

Thanks

Edited: 06/26/2010 at 11:57AM

Julia J

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Mar 07 '10, 07:20 AM

Thanks Financexaminer, I will check that out in my state!

Edited: 06/26/2010 at 11:57AM

Jon Holdman

Real Estate Investor · Wheat Ridge, Colorado

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Mar 07 '10, 09:12 AM

No, there's really nothing you can do unless your lease covers this. If the lease says utilities are included, and doesn't provide any limitation, then you're stuck. If you try to install special thermostats, the tenants will trick them.

Once upon a time, specifically, before 1973, energy was just dirt cheap. Nobody though twice about providing utilities because it was impossible to have a significant bill. I was just a kid then, but remember filling a car's tank for $5.00. And that's from empty. Lots of buildings were built with common utilities. Before venturing into such a building, I'd figure out some way to split the utilities.

Even water can be a problem. I've looked at numerous REOs that had multiple hot water heaters and washer/dryer hookups. You can be they weren't just doing their own laundry.

Edited: 06/26/2010 at 11:57AM

Jon Holdman, Flying Phoenix LLC

Mike Haro

Real Estate Investor · Indiana

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Mar 07 '10, 11:18 AM

If this were a building I owned I would do one of two things, 1: Install electric baseboard heat assuming I had sufficient electrical service coming into the building. 2) Install a gas forced air furnace in each apartment and have separate gas meters installed be apartment.. If there is a sufficient sized circuit panel located in each apartment than it would probably be more feasible to go with electric baseboard heat.

Edited: 06/26/2010 at 11:57AM

Ingrid Nagy

Property Manager · Passaic, New Jersey

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Mar 07 '10, 06:14 PM

I would set the thermostat in each apartment, make sure its calibrated, and install a clear plastic locking cover on each for which only you have the key. Many offices and stores have them to keep their staff from playing with the thermostats. Not an expensive fix at all. Set the thermostat at one degree above the minimum required by law. You may have to provide heat but only during the allotted heating schedule for your City/State. On the day the heat goes off, April 15? or May 15? shut down the boiler switches in the basement.

Edited: 06/26/2010 at 11:57AM

Michael Rossi

Real Estate Investor · Ohio

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Mar 07 '10, 06:31 PM

I would set the thermostat in each apartment, make sure its calibrated, and install a clear plastic locking cover on each for which only you have the key.

Unfortunately, that won't help. The tenant will simply buy a couple of those re-freezable ice bags. They'll keep one in the freezer and one on the plastic cover. Problem solved - the heat will flow like the thermostat was set on 100!!!

Worse yet, since tenants are lazy, they won't get up to move the ice block once the temperature in the apartment gets high - THEY'LL JUST OPEN THE WINDOWS - GUARANTEED!

Edited: 06/26/2010 at 11:57AM

Ingrid Nagy

Property Manager · Passaic, New Jersey

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Mar 07 '10, 06:40 PM

You might be right in the case of a really crap tenant out for blood...but then again we have to think of what action got him to that point of seeking revenge to go to such an extreme requiring such effort.

I have low income tenants and I have never once owned a building where the tenant supplied/paid for heat. Perhaps a bad move but for me, but in my location our buildings are all old and landlords supply heat. My best building turned 100 years old last month!

Edited: 06/26/2010 at 11:57AM

Julia J

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Mar 07 '10, 11:31 PM

Thank you everybody for your input!!!

Edited: 06/26/2010 at 11:57AM

Bryan Snyder

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Jul 26 '10, 11:26 AM

Originally posted by Ingrid Nagy

I would set the thermostat in each apartment, make sure its calibrated, and install a clear plastic locking cover on each for which only you have the key. Many offices and stores have them to keep their staff from playing with the thermostats. Not an expensive fix at all. Set the thermostat at one degree above the minimum required by law. You may have to provide heat but only during the allotted heating schedule for your City/State. On the day the heat goes off, April 15? or May 15? shut down the boiler switches in the basement.

Bump for an old thread...I see the same open doors and windows in the winter too in certain buildings in my town. Of course they are also wearing shorts and a tank top too....

If feasible and legal, I would remove all thermostats from individual apartments and have one master thermostat in the boiler room (or some other room inaccessible to the general tenants) set to a specific temp and set to shut down entirely or partially (in case it also heats the shower water) from April to October. They get cold, they can wear a sweater.

I will have to ask the FIL how that would work.....

Ingrid Nagy

Property Manager · Passaic, New Jersey

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Jul 26 '10, 06:36 PM

Unfortunately in older buildings with a central boiler you will probably see the same windows open in certain apartments no matter what you do. Even with one main thermostat calibrated to kick on when outside temperature reaches 55 and then the secondary inside temperature that you set, it all depends on the boiler. Steam boilers need to build steam before they can heat. The loop branches out from the boiler into units, flows to the farthest apartments and then comes back in the return lines to do it over again. Lots of times the apartments closest to the boiler are very hot but you must maintain the minimum temperature for the farthest apartments (thus the closest ones will always be toasty warm).

P NW

· OR

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Jul 29 '10, 04:47 AM

Julia, separate the heat.

Even if you decide to sell, separate the heat first. You will have trouble selling a property where the landlord pays for the heat and when it sells, you will have to accept a low price for it.

Sharad M.

Real Estate Investor · Chicago, Illinois

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Aug 05 '10, 08:33 AM

Can you put something in your lease that says something to the effect that the tenants will pay prorated portion of the utilities that are not divided?

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