Tenant Water Bills

[Matthew Ginsberg]

I manage rental properties in Hagerstown, Maryland. In my Lease Contract with tenants, the Lease says tenants are responsible for paying all of their utilities, including water.  Water bills come in once every 3 months and I give tenants ample notice prior to updating their accounts with the water bill charge. When water bills come in, I pay tenants water bills to the Water and Wastewater Department directly and they reimburse me the cost owed with their next months rental installment. I have to do it this way for legal reasons. A few months ago, one of my tenants stopped paying his water bills, but continues to pay rent on time. I'd like to take legal action against the tenant to collect the amount I'm owed, but I don't think I can file a small claims case, since the water bill account is in the owners name (the account must stay in the owners name for legal reasons). The tenant is breaking the Lease by not paying the water bill amount owed. What are my legal options? 

[Kevin Sobilo]

@Matthew Ginsberg, I'm guessing the provider of the water and wastewater is a government entity that can lien your property if the bill goes unpaid. In a situation like that I think you are doing the correct thing in billing back the tenant because the utility is based on usage and not a flat fee that you can bake into the rent price.

My leases state that any monies the tenant owes (fees, utility bills, etc) are "payable AS RENT" so that if a tenant does not pay that amount when the next monthly rent is due, I can take the appropriate actions the same as any other unpaid rent situation.

So, step 1 is to communicate and to apply any late fee after any grace period passes. Then to start the eviction process if the tenant is not being communicative/cooperative. Its a cookie cutter eviction for nonpayment of "rent".

I have also had leases where the language is slightly different and these bills are "payable BEFORE rent". So, that any payment you receive pays these bills FIRST leaving their monthly rent unpaid. How you proceed is the same either way. 

[Matthew Ginsberg]

Thank you so much for responding! You are correct, the provider of the water and wastewater is a government entity that can lien the property if the bill goes unpaid and the utility is based on usage not a flat fee.

My leases also state that any monies owed are considered rent under the lease contract, but under these circumstances, I can't enforce it. In Washington County, Maryland (where the rental property is located) I legally can't file a failure to pay rent claim to get the tenant evicted if the tenant doesn't pay a utility. I can only file a failure to pay rent claim to have a tenant evicted if the tenant fails to pay their base rent amount (but the tenant pays his base rent amount on time every month). To make matters worse, I can legally only charge a one time 5% base rent late fee on rent, but not on other charges owed. 

If you have any other suggestions, I'd really appreciate it. Thank you again for your time and for your advice! 

[Jacopo Iasiello]

Hi Matthew, Remember, navigating legal issues with tenants can be complex, so it's crucial to proceed cautiously and seek professional legal advice when necessary. Additionally, maintaining clear and open communication with the tenant throughout the process can help facilitate a resolution.

[Russell Brazil]

The bill does not need to stay in the owners name. It can absolutely stay in the tenants name with the landlord or manager receiving a copy of it from the water company.

[Nathan Gesner]

Quote from @Matthew Ginsberg:

Start termination. Get them out and then use the deposit to cover the unpaid charges.

My lease says that all payments are applied to non-rent charges first, oldest to newest. If the tenant owes $1000 rent and $100 for water but only pays $1,000, then I will apply their payment to water first, then to the rent. This leaves them $100 shy on the rent payment and subject to eviction for non-payment of rent.

[Theresa Harris]

Give the tenant notice and tell them they are in violation of their lease by not paying the water bill. If they don't pay up, start the eviction process.

If that doesn't work, then simply do not renew their lease and once they are out, use their deposit to pay for the water bill.

[Kevin Sobilo]

Quote from @Matthew Ginsberg:

Thank you so much for responding! You are correct, the provider of the water and wastewater is a government entity that can lien the property if the bill goes unpaid and the utility is based on usage not a flat fee.

My leases also state that any monies owed are considered rent under the lease contract, but under these circumstances, I can't enforce it. In Washington County, Maryland (where the rental property is located) I legally can't file a failure to pay rent claim to get the tenant evicted if the tenant doesn't pay a utility. I can only file a failure to pay rent claim to have a tenant evicted if the tenant fails to pay their base rent amount (but the tenant pays his base rent amount on time every month). To make matters worse, I can legally only charge a one time 5% base rent late fee on rent, but not on other charges owed. 

If you have any other suggestions, I'd really appreciate it. Thank you again for your time and for your advice! 

Then I would change the lease to say that the utility is "payable BEFORE rent", so that the law will see that when they made a payment the utility bill was paid FIRST and that what is unpaid is a portion of the rent. For you its a matter of semantics, but for the law I would think that would suffice.

Or I would issue them a lease violation warning for the unpaid utility bill and then when they don't take the corrective action evict them for lease violations. You aren't evicting because the utility isn't being paid only because they violated the lease and didn't correct that. The fact that the violation is about utility bills should be immaterial.