Surprise lien letter from WA utilities on my recent duplex

8 Replies

I live in California and I purchased a duplex in WA State and closed on 7/24/2015.  I had a PM already contracted to take over the same day, which he did go over and talk to the two tenants.

Last week, on 9/16, 2015, I received a letter from the utilities that stated that in WA State, the owner is responsible for water/sewer/trash and that my tenants are delinquent, and it is a lienable offense!  I was very surprised, since I had not heard about this and my PM never mentioned it.  The utilities said that the PM never registered in July as my PM and that if he had, he would have received a duplicate bill and could have been on top of it, but that's a different story.  PM's need to register themselves as an owner's PM to be able to deal with utilities directly.

Since the trash is a fixed amount, I think that I will add it to the monthly rent once the leases expire.  It's only $20 a month, and a PM will get the duplicate bill, not a tenant.  Twenty dollars more on top of the rent amount won't seem exorbitant.

But water/sewer is where I'm trying to decide if to have tenants pay directly with a "tenant" bill, or if I should charge an average on top of the rent?  With the base fee, step1, step2, step3, along with sewer base and steps, the charges are always different and confusing, so it will be hard to get an average.  Most likely I'll have the PM monitor the duplicate bills to see that they are kept up with, and try to collect when not paid, because I don't want to get stuck paying them when the tenants ignore it.

Is it grounds for eviction when the lease stipulates that tenants are responsible for paying utilities?

What do you Washington State landlords do about this?

Originally posted by @Carlos Enriquez :

I live in California and I purchased a duplex in WA State and closed on 7/24/2015.  I had a PM already contracted to take over the same day, which he did go over and talk to the two tenants.

Last week, on 9/16, 2015, I received a letter from the utilities that stated that in WA State, the owner is responsible for water/sewer/trash and that my tenants are delinquent, and it is a lienable offense!  I was very surprised, since I had not heard about this and my PM never mentioned it.  The utilities said that the PM never registered in July as my PM and that if he had, he would have received a duplicate bill and could have been on top of it, but that's a different story.  PM's need to register themselves as an owner's PM to be able to deal with utilities directly.

Since the trash is a fixed amount, I think that I will add it to the monthly rent once the leases expire.  It's only $20 a month, and a PM will get the duplicate bill, not a tenant.  Twenty dollars more on top of the rent amount won't seem exorbitant.

But water/sewer is where I'm trying to decide if to have tenants pay directly with a "tenant" bill, or if I should charge an average on top of the rent?  With the base fee, step1, step2, step3, along with sewer base and steps, the charges are always different and confusing, so it will be hard to get an average.  Most likely I'll have the PM monitor the duplicate bills to see that they are kept up with, and try to collect when not paid, because I don't want to get stuck paying them when the tenants ignore it.

Is it grounds for eviction when the lease stipulates that tenants are responsible for paying utilities?

What do you Washington State landlords do about this?

 Question 1: Don't have a answer for what would work for you. I have the tenant pay every two month and if they are late I give them a friendly reminder. 

Question 2: What does your lease stipulate? If they signed the lease to pay it then they are violating the lease. Give them a 10 day notice to pay or face eviction. Tenants miss it because it's their only bimonthly bill. If it's outside of the city limits the county has a separate bimonthly sewer bill. 

Question 3: I think most simply pay it and pad the rent but that is my speculation. 

When the PM sends you their monthly statement have them include a copy of the bills you mentioned above. Clearly, this PM needs a bit of monitoring for the moment. You may also be able to get a copy of the bills. At one property the city will send the owner or PM a copy by email in addition to the tenant. In your lease stipulate that all other charges are paid prior to payments being applied to rent. This way everything else is paid and you can move to evict based on non-payment of rent.

With trash being fixed (assuming they can't order more cans/service for more money) that would be easy enough to include in the rent. See what your competition is doing and adjust/advertise as appropriate. As far as utilities, if the competition does not include them then absolutely don't include them. Many tenants will be more then happy to leave the windows open in the winter while they have the furnace on. Since they have no incentive to save they will enjoy coming home from work to an ice box in the middle of summer.

Having them place a lien on the property because of unpaid utilities is common.

Here in Central WA, no multi's are separately metered for water, so that and sewer are paid by the landlord.  It is reflected in rents here.  I see some charging a base rent + fixed utility surcharge of like $40/mo on an $800 rent.  Garbage, of course, is LL-paid as well w/ multi's

You are fortunate to even have separate water meters.  If you don't, it has probably always been a landlord expense @Carlos Enriquez

Yes, the property was built in 1991 so utilities are separately metered.

Lease says tenants pay utilities, so my PM will keep track with a duplicate bill.

Gas and electric aren't lienable in WA so if they don't pay, they don't get service and I don't have to be concerned about it.

Thanks all.

@Carlos Enriquez all my SFR and duplexes are individually metered and the tenant is required to pay. If the tenant is good otherwise, I don't much worry about their late payment. They will get a shut off notice and pay the bill in order to keep the water flowing! Do check when they move out to be sure they pay the final bill or take it out of their deposit.

Curtis Bidwell MBA, Philia Holding Co LLC | http://www.PhiliaHC.com | Podcast Guest on Show #95

Water/sewer does have to stay in the owner's name. I pass on the costs to my tenants and they pay. I PM my places so I watch the account online to make sure they pay. If they're late a friendly reminder does the trick. 

Some people include it in the rent but I did not want to do that since the bill can fluctuate with consumption. 

There was a good point about not adding the charges to the rent, because renters look for the rent amount when searching for a good rental, and adding more to it may deter good renters.  The utility companies told me that they provide duplicate billing for trash and water/sewer.  They send the original to "tenant" or "resident" at the property address.  My lease will stipulate that they pay all utilities, or the charges will be taken from their rent payment first, in which case they will be late with rent and will be asked to pay or quit.  I will not take partial rent payments after utilities are deducted from them.

If I get good tenants, I don't foresee any problems.  It's this one inherited tenant that is delinquent for all utilities and is giving me trouble.

After getting stuck with a $600 WSG bill, we now try to get it included with rent.

Since I am in low income and some low income tenants qualify for reduced rates if the account is int heir name, we don't require it stay in our name, but we set things up so they are incented to include it in rent.

We advertise the unit at the lower rate, then include this int he ad and on the application:

Tenant pays all utilities. PUD account is in tenant name. Choice to add WSG to rent for $135/month or increase deposit by $300.00 to have account in tenant name.

The application has a box for them to mark with option they prefer.