Utilities: Multi-tenant, One meter. Help needed on transferring utilities name

11 Replies

Hello, I have seen several informative posts on who should pay utilities (landlord vs. tenant), however wanted to ask for advice specific to my case. Firstly I should say that I am the tenant in this case -- I joined these forums a while back because I was very close to being a landlord myself, however this case involves my current rental situation with my landlord.

I have a unique living situation. I live in a building that has one apartment upstairs (which I occupy) and 3 downstairs studios (used for music/artwork). I am one of three tenants here, but I am the only one living here full time. Upstairs where I live is residential, downstairs is commercial--I use one of the three rooms as a studio and two other tenants rent out the other two rooms. I've live here around 4 years and have a good relationship with my landlord. So, a longtime tenant from downstairs is moving out of his studio. For the duration of my stay here his name has been on all the bills and we pay him back. There is only one electric meter and since I'm here the most I pay 60%, and he and the other studio renter pay the rest (20% each). 

Well, now this tenant is moving out. So we have to transfer the bills out of his name. My landlord wants me to put electricity in my name--which I'd be fine with, but I don't want the responsibility of having to collect utilities from other tenants. Sure the previous tenant took on this responsibility but he and the landlord had this long-term relationship. The landlord has all but refused to put the electric bill in her name and we are close to having the power cut off if we don't decide. I've suggested that I put the bill in my name, which I'm fine with, but that the onus of collecting from the other tenants should be on her--so I would pay the single bill in full each month, but then take out the 40% owed by the other two tenants in my monthly rent/utilities payment to her (my landlord). This seems reasonable to me, since I'm taking responsibility for the full bill upfront, and paying my 60% portion. It's just that I would pass on responsibility for the other tenants portion to her. She doesn't want to do it this way claiming that doing the math each month is too complex (even though I offered to make her an Excel spreadsheet to help her keep track). Also she is concerned that if my monthly payments to her vary (because I would deduct tenants utilities which I already paid), she thinks it will look like she is collecting variable rent?? 

Overall I have a good relationship with my landlord and just want something that is fair. But I feel like she is used to the previous setup where a tenant took full responsibility for paying for a single meter, and now that he's moving out she wants me to take on this responsibility. Any suggestions on a fair way to proceed? Again, I'm fine having the bill in my name, it's only that I don't want to be responsible for collecting utilities from my downstairs neighbors. Any advice appreciated.

What does your lease say regarding utilities?  My leases very clearly state at the top what the owner pays and what the tenants pay.

Generally speaking it sounds like the landlord needs to put utilities in their name and administer any split.  It sounds like the landlord is lazy and doesn't want to do anything extra so they should at least accommodate you if you're willing to do this for them.  Depending on how the lease is worded the landlord refusing to supply utilities might be a breach which would entitle you to move out or refuse rent payment depending on local laws.

Yes, I agree with the above poster.  The landlord is being lazy.

If she doesn't want to do the math every month, then she should find out what the average bill was for the last year and divide that accordingly between the tenants (40-20-20) and just charge that much more in rent and be done with it.  

We just bought a 4plex with gas and electricity split 5 ways (5th account for common areas) BUT the leases all had the landlord paying the utilities as long as they did not exceed $175 in a month.  Perhaps she could include some wording like that in her new agreements, though it does get complicated when they aren't separately metered, which is why I just pay the bill and charge more for our house like that.

Kelly

Thank you guys so much. I'm trying to find the nicest way to explain to the landlord that this is now her responsibility without using the word "lazy", lol :-) I think more than lazy she is just inexperienced...all of us (landlord and tenants) are artists to some degree. I think she's scared of taking responsibility of the other two tenants 40% of utilities, but I don't think it's fair to me. I think the previous guy from downstairs whose moving out has been here for at least 15 years and my landlord got used to him handling everything...now she wants me to do the same but I don't want to. I'm in a bind though, because now the guy moving out is taking his name off everything which is absolutely his right, but we have to act fast or I will be completely blacked out of electricity. 

Regarding my rental contract: My current rental contract simply states that other than garbage that tenants are responsible for utilities according to an addendum added to the contract. I have to look for this addendum but me and the other two tenants worked out the 60/20/20 percentages and I have this documented somewhere just need to find it. Now that the tenant paying utilities is moving out I simply think we need to recreate and sign an agreement...

Which leads me to ask the question--if you have any suggestions for getting a template for an addendum to the current lease I think this will help. To be honest, even though I'm only a renter, I think I may know a bit more about land ownership than my landlord in some capacity. I'm hoping I can find a good document that says that I will put utilities in my name and then subtract out 40% of the bills in my monthly payment to her which will put her at ease. Hoping that if I do the groundwork to get the legalize I can take care of things before utilities are shut off--thanks so much for your help.

This post has been removed.

Hi Kelly, also I wanted to ask for the situation where you pay the utilities and charge more--do you charge more on a month-to-month basis or do you simply look at past utilities costs and use this as an average but set cost added to your tenants' rents? One thing both me and the landlord want to avoid is the other tenants having utilities wrapped into rent and then just wasting tons of power because their monthly bill is the same. I completely understand this as well so want to avoid it. Maybe there is a way to word the agreement that she has to be the collector of utilities and that they will be calculated month-to-month depending on the bill? Really, I'd do anything just to not have to be responsible for collecting from the other tenants.

Can't speak as a landlord, but as a tenant I'd say NO. She's asking you, the customer, to financially shoulder some of the risk for her business. Just say no. 

I'd also start looking for another place to live. If she cuts corners like this, it's likely she's doing it elsewhere and in ways that may come back to bite you. Think asbestos or mishandling the application with your ssn on it.

If you end up doing it anyway, have a written agreement and keep records of every bill and repayment from now until you leave.

No way I would put someone else's utilities in my name.  You shouldn't have to deal with that stress every month.  The Landlord will find it hard to rent any portion of the building when there is no electrical power.   If you refuse to do it, will you rent go up? 

And when the other tenants dont pay you , what will you do ?

Originally posted by @Account Closed :

No way I would put someone else's utilities in my name.  You shouldn't have to deal with that stress every month.  The Landlord will find it hard to rent any portion of the building when there is no electrical power.   If you refuse to do it, will you rent go up? 

 If I refuse to do it, and the landlord refuses also then in a couple of days when the old tenant removes his name from the bill I'm assuming they will cut off electricity. Sure I may be able to prove or show in some way that the landlord has/needs to take over the bill but I'd have to deal with no power which means I simply couldn't live here. 

I'm going to go the route of just trying to draw up a new addendum myself where I put the electric bill in my name (which I think will make her less worried), but that I will deduct the 40% of bills that I pay for each month out of my monthly payment to her, so that she is responsible for collecting from tenants. I just don't see any other way other than her putting the bill in her name and all three tenants simply paying her (which would be great, but seems to make her most uneasy). Like I said I have a good relationship with landlord, and I have a good rental price so I just want to avoid as much conflict as possible. But your advice here has helped me a lot in understanding that I shouldn't have to collect from the other tenants. 

All of this has to be resolved in the next few days so I'll let you all know how it goes either way. Thanks! 

You should get the other tenants to each pay you a deposit on their portion of the power then. 

Hi again,

Sorry I wasn't clearer- we charge the same rent year round, I just have the utilities factored into my costs.  Winter gets a little lean but summer looks great!  My tenants appreciate a consistent expense for their housing and I do think it makes the apartments easier to rent in that house.

Before you put the utilities in your name, I would ask her what she plans to do when you leave or if you were to lose your job and be unwilling to pay the bill?  Then the electricity gets shut off on your the other two tenants as well...  But I like your idea of deducting 40% of the bill from the rent- that puts collecting the utility money on her instead of making it your problem.

Another option would be to get it metered separately- I'd suggest 4 meters since your studio space and apartment space might not always be rented to the same person.  Expensive?  Sort of, but maybe it'd be worth it in the long run, and for resale.  We plan to separate ours out at the house with just one meter, but pretty much wait until we've created a time with all 3 empty so we can rewire the house.

Kelly

Join the Largest Real Estate Investing Community

Basic membership is free, forever.