Raising Rent In Norman Oklahoma
I am renting out a house I own in Norman Oklahoma. I currently have tenants in place with utilities included in their lease. They have been using much more electricity than I expected. My question is: am I able to raise the rent to account for the additional electricity costs or would I need to wait until the lease expires? They currently still have about 6 months left. Local investor replies would be greatly appreciated!
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#5 Multi-Family and Apartment Investing Contributor
- Investor
- Shelton, WA
Can’t change rent mid lease anywhere I know of.
Unfortunately I don't think you can unless you have a clause built into your lease that allows you to do so. For future properties I would recommend having tenants pay utilities just to save you the headache in the future.
I'm a real estate investment specialist in the Oklahoma City and Tulsa markets and I work with a lot of investors like yourself to help connect them to investment properties. My team is moving 35 properties/month across Oklahoma. I'd love to connect and share some info on the market. Feel free to reach out if you're interested in a phone call at some point!
Quote from @Ross Baggay:
I am renting out a house I own in Norman Oklahoma. I currently have tenants in place with utilities included in their lease. They have been using much more electricity than I expected. My question is: am I able to raise the rent to account for the additional electricity costs or would I need to wait until the lease expires? They currently still have about 6 months left. Local investor replies would be greatly appreciated!
You cannot legally change the terms of a lease during the lease, unless both parties agree.
My recommendation? Pretend you don't know better. Send them a short letter that the rent included electricity up to $XXX. Because they've regularly exceeded that, you'll need to increase their rent to $XXX to cover the excess use. Include the last few electricity bills as evidence. Ask them to sign the document acknowledging the increase and the start date of the new rate.
If they sign it, you're golden. If they don't, stick with the existing terms until their lease is over, then move them out and start fresh. At least it's not that expensive of a lesson to learn.
In the future, make Tenants establish their own utility accounts and pay the utility provider directly. If that's not an option, consider passing the utility charge to them each month by receiving the bill, adding the charge to their rent, and providing the tenant a copy of the utility bill as evidence. If you insist on including utilities with the rent, I recommend you include a clause that says:
"Advertised rent rate includes ordinary utility use, up to an amount not to exceed $XXX. If any single utility bill exceeds $XXX, Tenant agrees to pay the difference."
@Ross Baggay Hey there! I'm in Tulsa OK. So legally you cannot change terms of the lease. If it were me, I would let them know that their electric bill is coming in pretty high and to expect their rent to go up come renewal time, or you can always charge back utilities, however you prefer to do it at that time. I would tell them if they can be more conservative that would create less of an increase in the future. That is how I would personally handle it and hopefully they will start being more aware of their consumption.
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Quote from @Nathan Gesner:
Quote from @Ross Baggay:
I am renting out a house I own in Norman Oklahoma. I currently have tenants in place with utilities included in their lease. They have been using much more electricity than I expected. My question is: am I able to raise the rent to account for the additional electricity costs or would I need to wait until the lease expires? They currently still have about 6 months left. Local investor replies would be greatly appreciated!
You cannot legally change the terms of a lease during the lease, unless both parties agree.
My recommendation? Pretend you don't know better. Send them a short letter that the rent included electricity up to $XXX. Because they've regularly exceeded that, you'll need to increase their rent to $XXX to cover the excess use. Include the last few electricity bills as evidence. Ask them to sign the document acknowledging the increase and the start date of the new rate.
If they sign it, you're golden. If they don't, stick with the existing terms until their lease is over, then move them out and start fresh. At least it's not that expensive of a lesson to learn.
In the future, make Tenants establish their own utility accounts and pay the utility provider directly. If that's not an option, consider passing the utility charge to them each month by receiving the bill, adding the charge to their rent, and providing the tenant a copy of the utility bill as evidence. If you insist on including utilities with the rent, I recommend you include a clause that says:
"Advertised rent rate includes ordinary utility use, up to an amount not to exceed $XXX. If any single utility bill exceeds $XXX, Tenant agrees to pay the difference."
This is fire!!! Follow Nathan for GOLD!
