Tenants not paying water bill

[Peter Christensen]

I self manage a SFH in St. Paul, MN. The tenants signed a lease that requires them to pay all Utilities other than trash/recycling. They put the water utility in their name, as I required, but it seems like they don't think they have to pay the bill. I keep getting notices from the city utility about it. When I call and tell them it's my tenant's responsibility, the City acknowledges that the account is in my tenants' names. But for whatever reason, I am still notified by the City so that makes me worried that I will be on the hook when they move out one day and this will destroy my credit. Whenever I confront my tenants about this, they either claim it's being taken care of by a third party payment plan they set up (probably some sort of debt consolidation program, presumably) or they tell me they have taken care of it. Yet I keep getting notices.

Anyone else have experience with this?  It's just odd to me, as the rent is paid on time each month and that is a far bigger bill.

[Patrick O'Sullivan]

Peter, this is a common headache with municipal utilities. Even if the account is in the tenant’s name, many cities (including St. Paul) ultimately hold the property owner responsible if the bill goes unpaid, often by attaching the balance to the property taxes. That is probably why you are still getting the notices.

A couple of things you might consider:
Call the utility directly and confirm what happens if the tenant never pays. Will it follow them, or will it eventually roll back to you as the owner?
Lease enforcement: If your lease clearly states tenants are responsible for water, you may need to treat nonpayment as a lease violation, just as you would with unpaid rent.
Change structure going forward: Some landlords keep water in their own name, pay the bill, and then bill tenants back (flat fee or actual usage). It avoids surprises and keeps you in control, though it is a bit more admin work.
Document everything: Keep copies of the notices and your communications with tenants. If this escalates, having a paper trail will help.

It is definitely frustrating when tenants pay rent but not utilities, but you are smart to get ahead of it before it snowballs.