Currently the duplex has 1 water meter. If a landlord add sub-meters to each unit, and charge water cost to each tenant, the landlord is still responsible for the water bill if the tenant doesn't pay. Is it ok to take deposit on water, and deduct from that if the tenant doesn't pay? And if the tenant doesn't maintain the deposit amount, can the landlord evict them?
The answer really depends on your state and local laws and varies from place to place.
Rather than worry about two deposits, an easier way (if you can do it) is simply collect a larger security deposit and make sure your lease includes unpaid water bills as something that can be deducted.
The best solution is to have a great property and find great tenants who pay their bills.
I've never heard of a deposit specific to utilities. However, if your tenants do not pay the utilities and you have to pay for it, in the case of water, then you can hold the tenants normal deposit for that amount. So I don't see the point of a utility specific deposit since the regular rental deposit serves the same purpose.
You need to learn your state landlord tenant codes to see if there is any reference to water billing.
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