Never put utilities in their own name
Burnsville, MN · Member since 2013 · 13 posts · 0 votes
Hello,
This is out first time renting out our home and after our tenants moved in they never put the utilities in their own name and I am still being charged for them. I plan on sending out a certified letter today stating they need to be put in their own name. I guess I am asking if anyone has gone through this how they handled it or for any suggestions on what to put in the letter. Im thinking it is possible grounds for eviction.
Melissa
Melissa quick question. Is it in the lease that the utilities must be in the tenants name? If not, then you are likely to be on the hook for them. Without language in the lease requiring them to pay utilities, you can't just assume that it's their responsibility. What about property taxes? If it's not in the lease that the tenant pays them they you pay them. Same idea with utilities.
Now assuming that you do have it in the lease from here on.
Second question - have you contacted the tenants and reminded them they need to put the utilities in their name? If not, do so before you do the certified letter route. In all the chaos of moving they may have forgotten and just need a reminder. You can follow up with the utility company in a day or so to see that they follow through with it. If not then see below.
Also my utility companies allow me to put the utilities in their name since I have the SSN and a lease. You might be able to just call up the utility company and move the utilities into the tenant's name again.
Now with regards to your notice. Your state probably has forms that are used to communicate to the tenant that they have violated terms of the lease. You need to use those forms so that you can move on to eviction if they fail to pay and are required to pay. Also does your lease have a clause stating the funds received are applied to outstanding items before rent. If that is the case then you apply the money you received to the power bills and they now owe rent. You can file for eviction for non-payment of rent. In many locations it's much easier to get an eviction for non-payment than for some other lease violation.
I haven't even taken the time to read all the posts, but the the owner still has their name on the utilities they would normally request something maybe the lease. I had a client who was selling but the home was tenant occupied.... well they were clever enough to put the utilities in my name. Hmmm hope this was clear and not confusing.
They may have had a stiff deposit, Im trying hard to refrain from choice words. Id turn them off and review your lease. May be time to move on. The utility co. may ask for their date of occupancy in which you can provide. Adding to the rent may not even work unless you have that in writing to, and possibly reviewed by legal.
I finished reading and I am floored by the response........ Truly someone would have been hearing crickets**** blink, blink**** between.
Try the letter route.
This won't work now, but in the future, make sure the tenants switch the utilities BEFORE signing the lease. I tell them that when they come to sign the lease, they need the money to move in AND confirmation numbers for the gas and electric. It's also a good idea to call and verify.
As far as your current situation, I think a simple conversation would go a long way.
Update to this situation,
My husband and I spoke with the husband (tenant) and they said that they had just discovered this themselves and we were supposed to go over that Sunday. They soon cancelled the next day. My husband has tried other days and they do not work for them. He went to the home while they were gone as he had given them notice. He worked on the outside not going on the inside. They now will not return our phone calls and they still have not put the electric in their name.
Plan:
I know we cannot shut off the utilities but need to remedy this situation. So I need to know If I am on the right path of progression with what we will do next.
I can give them an itemized statement or bill for the utilities stating what is in the lease along with a certified letter.
Or
Do I just follow through with a filed complaint at this point since they have never put it in their name even after talking and telling them they need to?
Thanks everyone for the help
Melissa Lenhardt
Melissa,
It is your fault for not turning off the utilities before you rented it.
Joe Gore
If you give them notice as required by your lease/local law you can enter (not sure what you would do in this case - but you could enter. You can do the certified letter but did you give them notice they are in breach of the contract and you are starting eviction? or notice you were coming.? If they are not changing utilities and you have given ample notice this sounds like it is not going in the right direction. What is your exposure here ? gas and electric? What kind of heat? We have oil tanks and propane not on contract so I would just not fill them (I am curious what the group opinion is on how that fits with cutting off essential services) but it sounds like you have a utility company and now you are stuck.
Update to this situation,
My husband and I spoke with the husband (tenant) and they said that they had just discovered this themselves and we were supposed to go over that Sunday. They soon cancelled the next day. My husband has tried other days and they do not work for them. He went to the home while they were gone as he had given them notice. He worked on the outside not going on the inside. They now will not return our phone calls and they still have not put the electric in their name.
Plan:
I know we cannot shut off the utilities but need to remedy this situation. So I need to know If I am on the right path of progression with what we will do next.
I can give them an itemized statement or bill for the utilities stating what is in the lease along with a certified letter.
Or
Do I just follow through with a filed complaint at this point since they have never put it in their name even after talking and telling them they need to?
Thanks everyone for the help
Melissa Lenhardt
If I were experiencing this, I would hand over a 5-day pay rent or quit notice appropriate for your state, which appears to require no advance notice before starting eviction process. State in detail that they are late with their October/sep whatever rent in full while monthly rent was paid, as the utility bills are outstanding for x dollars and are processed first and that is tenant responsibility per section x of the lease contract. tape it to the front door in an envelope. contact attorney to get ready to file eviction case to proceed on day-5 if tenants don't respond. it's usually a good scare to get them to respond and comply, but sometimes only evictions work. They need to pay you all outstanding utilities within 5-days AND show proof of utility transfer in order for you to not proceed with eviction.
In order to avoid this in future, try this bulletproof strategy: Communicate with tenants that move-in will only occur if tenants have proof that utilities are transferred prior to handing over keys. They are to provide account numbers as proof and you can call utility to verify account is created. You can request this days before move-in. They can setup billing account in advance to commence on move-in date. tenants transfer utility back to owner name upon move out. Further, there is no need to shut-off utilities or pay shut-off fee as you will likely want/need to use utilities during vacancy for potential repairs/upgrades. This won't happen again in future if you were to require account setup of utilities to happen prior to move-in. I would send them home if they didn't have proof of transfer at move-in day too...
I require tenants to provide proof of utilities prior to move in, but here in Dallas the water company requires a signed copy of the lease to switch utilities to their name. I usually meet them either the day the lease starts or 1 day before, sign the lease and hand over keys. I tell them to switch water ASAP. Luckily so far this has not been a problem, but I am worried about the exact situation the OP is facing.
I guess I could have them sign the lease ahead of time, but then I'd have to make an extra trip to hand over the keys...
I really think this is an issue that varies state by state. I would not be shocked at all that you could get hosed with this utility issue in CA. In Texas, I would be very surprised if the same was true. I just did a couple of Google searches (nothing significant) for Texas, and I could not find anything that in Texas if you accidentally forget to turn the water off before your tenants move in, you are somehow on the hook and can't turn it off. In fact, looking at Tex. Prop. Code 92.008, which deals with the unlawful disconnection of utilities, it seems pretty clear that this is not prohibited. You only get in trouble if it's an all-bills paid situation or you're messing with your tenants' utilities (i.e. they are in their names).
@John Chapman I realize that Texas is pretty LL friendly but it's a pretty universal concept that turning off the utilities (even if the lease says it's their responsibility) is a self help eviction in which case the LL loses. The idea being by turning off utilities you are making a place uninhabitable and the courts provide remedy for the money issue.
@Melissa Lenhardt so the first step is to get your lease out and see what it says. If it specifically says that money received is first applied to outstanding fees and expenses first and rent last, then post notice that rent is late and move toward eviction. If it doesn't say that, then hire a good landlord friendly attorney and take their advise. Note that you need to follow your state's laws regarding notice etc. and my terms may not be what your state law uses.
A different route to consider. They are hiding and are avoiding contact which is not a good sign. They probably don't have the money. Perhaps you could offer an olive branch and offer to forgive the past. This would be much cheaper than an eviction and winter vacancy (the choice is to be right or rich). Put this offer in writing with a specific and short deadline. For example if you put the utilities in your name by 5 pm on Oct 31 then we will forgive the outstanding debt. Post it on their door if they won't answer. Also send them an email, text, and leave a voice message.
All that a certified letter does is prove it was sent. It doesn't put money in your pocket.
Thanks again William your replies have been very helpful, thorough and to the point. This is exactly where we are. My husband showed up tonight and the husband (tenant) was home. He showed us the gas bill that I put in their name and said that he will put the electric in their names. My husband told him he wanted him to let him know when the switch was made. We are much more willing to work with them on back payment than have the house sit empty this time of year. After confirmation that it has been changed I will send them or hand deliver them a bill for the back utilities owed.
Huge lesson learned for first time LL's going forward we will :
1.) Make sure the lease explicitly states all moneys owed will be deducted from rent.
2.) Make sure the keys are handed over after proof of utilities are put in their name.
Thanks everyone, I'll keep you updated
Melissa
@Melissa Lenhardt , you have received some great advice on this forum,(and a small amount of really stupid advice). In these situations I always recommend you go to a real estate attorney for advice. You will sleep better and get advice from someone who truly knows the local law, the courts, and is truly an expert. A consultation should be reasonable in price. I cannot imagine it would take more than 30 minutes.
Some states do have laws on turning off utilities, some do not. Wyoming has no law prohibiting turning off utilities on rentals. Some towns however have their water/garbage/sewer bills follow the land, not the tenant so landlord pays even if utilities are in Tenant's name but not paid.
To further complicate matters some counties, and even towns have landlord tenant laws that are different from state law. If you did not know that then you could make a mistake that would hurt your case. Go to an expert, do it soon to stop the heartburn and potentially financial loss. I would not consider leaving this kind of a tenant in a rental if I had a choice. If the tenant was honest and said I don't have the money for the deposit, I would work with them, but not the avoiding contact type.
@William Shaffer I'm not sure where you are getting it's a "pretty universal concept that turning off the utilities (even if the lease says it's their responsibility) is a self help eviction in which case the LL loses." It's sweeping statements like this that miss the point that landlord/tenant laws vary massively by state. I practice law in Texas, appear regularly in Texas courts, and am (generally) familiar with the property code here. I would feel very comfortable turning off the utilities if the lease required the tenant to pay utilities, the tenant had told me they were going to do so, and they hadn't done so. I'd let them know beforehand as well as that I'd sue them for breach of the lease if they didn't promptly put utilities in their name, as required by the lease. As far as I can tell, there is nothing unlawful about this. I'm not talking about a situation where maybe there was some course of conduct (months had gone by and i'm paying the utilities). Maybe that's where we are missing each other.
@John Chapman so what I hear you saying is that based on your knowledge of Texas law there is nothing to prohibit you from turning off the utilities unlike in states like CA as was pointed out above. So for me to say it's illegal to turn of utilities shows my lack of understanding of landlord tenant law in Texas and Wyoming (@Jerry W. ). I am wrong. A reframe of the point of my post so that it is technically correct (in all areas) would be in order. The point being that turning off utilities puts the LL in a potentially compromising position in addition to it being illegal in many many areas. Sure the state law doesn't say (in Texas and Wyoming or where ever else) that I can't turn off utilities but it also doesn't prevent a sympathetic judge from siding with the tenant. I'm sure you, as an attorney, have seen that judges sometimes fill in with their personal perspective where the law is not completely clear. I would be willing to bet you a lunch that somewhere in Texas a judge has ruled in favor of a tenant when the LL turned off the utilities because they were supposed to be in the tenant's name.
I wholeheartedly agree with your approach of suing for breach of contract as it's fully within the law and does not compromise your position in any way.
J8st posting this so @John Chapman , and @Bill S. , and others get a smile. Wyoming law is ... well different, It has only been in the last ten years we have put a law on the books about tenants rights on having running water, and even then you have to send written notice to the landlord if you do not have running water before you can withhold rent. However we have laws 100 years old on how to make a legal fence. How many strands of wire, how far off the ground for the bottom strand, how far apart the wires can be how far apart the posts can be if they are wood, how far for metal, etc. We even have laws making it illegal for failing to close a gate you open if it is not yours. Just thought you would get a chuckle about that.
One other thing to add to your tenant selection process that relates to utilities.
Get the tenant's FULL credit report; it will have their payment history for all accounts reporting to the credit bureaus. Utilities almost always report to the bureaus. If they are not current on all utility bills wherever it is that they are now living, you can't expect them to do that in your place. And if they aren't paying utilities, the utility companies won't give them service in their name. And you can draw your own conclusions on that sort of tenant applicant; my rental criteria would reject them if the tenant was required to pay utilities (all my units to date are tenant paid utilities of one sort or another).
You should have had them switch utilities in their name and confirm it with the utilities company prior to letting them set foot in the house.
we hold the keys till then show us the recipt from the utilities being put in their name and deposit in full.
@Steve Babiak
One other thing I started recently: It's to bad you can't put water in their name, but what a fellow landlord told me, was they add $50 to the rent every month to go to the water bill and have the water bill sent to the the landlord's address. Every three months it's sent here. If the water bill is more than $150, then the tenant agrees to pay the difference that month with the rent.
Good morning all,
Lots of good information, I completely agree with you @Steve Babiak. With a little effort looking into credit history the situation could have been avoided. Like you all my units are tenant paid utilities, I haven't had any problems.
@Trevor Rutherford I contact the utility company a couple of days prior to a tenant moving in and inform them that the utilities will need to be switched into the tenant's name. Then I let the tenant know they need to call the utility company. I follow up with the utility company a couple of days later to make the switch has been made.
One other thing I started recently: It's to bad you can't put water in their name, but what a fellow landlord told me, was they add $50 to the rent every month to go to the water bill and have the water bill sent to the the landlord's address. Every three months it's sent here. If the water bill is more than $150, then the tenant agrees to pay the difference that month with the rent.
This is a great idea especially for tenants who can't seem to budget their money more than one month into the future.