I need to provide internet and cable TV to existing tenants, seeking advice on the best and reasonable compromise...

6 Replies

In the process of finalizing the purchase of a triplex.  Fully rented to three tenants with yearly lease, to expire May 2015, July 2015 and August 2015.

However. in reading over the lease - the seller has written into each of the lease that internet and cable TV are included with rent.

Investigating further, it is a personal Comcast account to the seller, and it's a SFR account, he has a cable modem in the laundry room, with coax cables running to the individual units, and tenants have the WIFI WEP password.

Obviously when the purchase is completed the account will be deactivated, and I am going to have to figure out a way to provide cable TV and internet service in accordance to the lease.

In speaking to the tenants, yes they use both, and yes they depend on both.

As a matter of preferences, I have never provided any of this to my tenants, I would rather not if I can avoid it.

I believe my options are:

(1) Negotiate with the seller to maintain the account in his personal name for now...he continues to pay for the bill and I would reimburse him for it.  This arrangement would last until August 2015 when the latest lease expires.  By that time I would have either new tenants or existing tenants signed under new leases without such services provided.

(2) Call up Comcast and see if they are open to creating a new account under my name with the same terms and rates and do a switch.  I will be responsible for the bill and it will be status quo until August 2015.

(3) Find out how much it costs to establish a new account with Comcast for EACH tenant to provide cable and internet.  Then reduce the rent for each by the amount of the monthly fees so that they can call to have their own cable and internet hooked up, and be responsible for their own bills.  This may actually be a good excuse to have them transition to my new lease so everyone is on the same page.

I am leaning towards option 3.  However, one potential problem is if they they don't all agree, say one tenant wants to keep things the way it is now and two tenants don't mind signing a new lease with a rent reduction to allow for their own cable/internet, I don't want to end up doing both.

Thoughts?

@Sam Leon  

In our case we provide complimentary Internet as a side effect of having fibre dropped into our properties for our property monitoring system.  

That said, if Tenants whish to add-on the television service on top of the Internet, we will add the service under our account.  We then sign a Utilities agreement with the Tenant and have them pay into a utilities fund at the start of each month.  We provide them with an electronic copy of the bill each month and every three months we reconcile.

If there is a deficit in the account we invoice them and payment is due with the following month's rent {this has only happened twice when we carried the electricity and natural gas and there was a very cold winter ... normally we set the monthly utility contribution high enough this does no occur}.  If there is a surplus, we give the tenant the choice of applying the balance towards the next month's rent or leaving it in the fund (make sense when we are carrying the heating fuel and winter is approaching) - we *only* refund the surplus to the tenant at the end of the lease {after deducting any final utility costs}.

There is no problem with carrying a utility in your (or your company) name if you have the tenant pay in advance and treat it as a strait bill through.

The bigger issue you may have with this instance is the vendor was using a single residential account to provide service to multiple units.

Option 2.  Honor the lease and then make the change when the leases end.  It easier on you and if they don't like it when it changes they can move and you can do what you need to do.  You can still offer the reductions etc but after the current leases end.  

The problem I see with choice #3 is that once you reduce the rent, they won't be happy when you want to increase it at the end of the lease. Choice #2 is probably the best one for now. Then, when you write up the new leases, take out that amenity. 

If everyone can agree, option 3 seems the best. Otherwise, you will have to go option 2. 

For option 3, to avoid the reduced rent issues mentioned by Michelle Na , you can offer a one time gift card or a certain amount. That way your rent wont be reduced year in and year out. 

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Well You can’t just raise the rent accordingly , you must honor the lease and the rental amounts wether you agree or not . Comcast will laugh at you if you ask them to reduce their fees and rates . What a foolish landlord the former owners were to actually put that crap in their lease .

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