There is 2 ways to go about utilities:
1. Sign up the utilities under my name and pass the bill on
2. Have the tenants sign up and pay the utilities.
Is there any paperwork I have to do to change the utilities out of my name and into the tenants?
Also if a tenant does not pay is there a lien against the tenant or the dwelling?
The response you're looking for should be specific to the utility company in your area. Here in Lincoln NE., I make my tenants change utility to their name. Water is the only one that can put a lien on your property if unpaid, but that varies also depending on you city.
A week after a new tenant moves in, I call the utility companies to verify that they have put the services under their name.
I recomend you call and ask them. Some utility companies have a form for landlords to add their properties in a list, that way you don't get charged a fee every time service changes to your name.
I hope this helps.
I recommend you confirm the perspective tenant can even get utilities turned on before you sign a lease with them. I was almost burned by that once. Signed the lease and called the utility company to transfer services to the tenant only to find out that they were ineligible to get gas and elecrtic in their name due to a $4,000 deliquent bill.
The tenant was forced to move and forefitted the 1st month rent and depost. Easiest $1100 I made in one week.
As part of my background check, I call the utility company. If they can't get the utilities in their name, I pass on 'em. Not all scenarios end up such as the one "bad" experience I had.
Have all utilities put in tenant's name unless a default payment can result in a lien on your property - an example of this is most areas is water.
I have posted his a few times, but it seems like there is still uncertainty out there..
Getting a tenant to pay any utility bill can be frustrating.
My end goal is to take Utility billing, collections, and customer service out of the owner/managers hands completely. Two services that make this possible: “sub metered billing” & “ratio Utility billing”
@Dent Law , why don't you share here on the forums? There are a lot of members who would like this information.
There are two way to manage Utility cost in a MultiFamily community..
The first service is called ratio utility billing, RUBS for short. This is simply the allocation of a master utility bill. We do so by using an algorithm that considers both square footage and occupancy. All utilities may be allocated using the RUBS system, so long as the county and city regulations are silent.
The second way of allocating the Utility cost is through sub metering. There is more capital cost with metering a property, but there is quicker return on investment, due to having 100% recapture at all times.
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