My tenants broke their lease and never once paid utilities
Member since 2020 · 2 posts · 1 vote
I just bought my first property (a duplex) and inherited some tenants. The previous owner said they had been paying, but I heard that the unit A tenants wanted out of their lease. I hadn’t heard much else, but I didn’t want to risk vacancy, and I didn’t know the extent of their wish to leave.
When informing the unit B tenants that there was a change of ownership, they asked if some of their family could move into unit A because the other tenants had left. This is how I found out that unit A was suddenly vacant.
I informed the former tenants of Unit A that if they forfeited their rental deposits, I would not forego legal actions, and they agreed over text. Now, I just found out that in the 3 months they had lived there prior to me buying the property, they had not once paid their utility bill.
What should I do now? I want to let the new people move into unit A as soon as possible, but I want to figure out what is going on with the former tenants beforehand.
Hi Mark,
Is the utility bill in their name? If so they would be responsible for the balance and that is taken care of between the utility company and the old tenants. The new tenants moving in would put the utilities in their name and have a zero balance.
If the utilities was in the previous owners name you are now responsible for that bill. Pay it and add it to your due diligence checklist for next time.
I wouldn't wait to figure it out with the former tenants before letting new tenants move-in. In their minds it's likely not their problem anymore since they're out already so don't be surprised if they ghost you. You may never get money from them so don't lose more money by having the unit vacant for any longer. Make sure you screen whoever moves in, don't just like anybody's third cousin twice removed from their mom's side move-in. Make sure they are qualified and if they are not use your discretion if you want to use a co-signer. And most importantly, make sure utilities are transferred to their name. Ask for account numbers prior to giving out keys.
If they paid utilities directly to the owner, still try to recoup the money, but don't hold your breath. Let them know if they don't pay by x date, you'll send their account to collections. Send it to collections and move on.
I would immediately read your local tenant/landlord laws. You will need to follow the lease and your local laws.
As for the folks that want to move in - pls have them fill out an application and screen them..... in fact I might list the property for rent and diversify my risk a bit by not renting to the other units family members
And finally, contact your local rental owners association and sign up for a newby landlord bootcamp or training series
Screen the people who want to move it as you would with any one wanting to rent from you. If the bill was incurred during the time the previous owner had it, talk to the lawyer who handled your closing and they can contact the previous owner and hopefully get them to pay.
Any bills that are attached to the house either you pay and get reimbursed by the tenant or have them send you copies of the paid bills.
Hi Mark,
Is the utility bill in their name? If so they would be responsible for the balance and that is taken care of between the utility company and the old tenants. The new tenants moving in would put the utilities in their name and have a zero balance.
If the utilities was in the previous owners name you are now responsible for that bill. Pay it and add it to your due diligence checklist for next time.
I wouldn't wait to figure it out with the former tenants before letting new tenants move-in. In their minds it's likely not their problem anymore since they're out already so don't be surprised if they ghost you. You may never get money from them so don't lose more money by having the unit vacant for any longer. Make sure you screen whoever moves in, don't just like anybody's third cousin twice removed from their mom's side move-in. Make sure they are qualified and if they are not use your discretion if you want to use a co-signer. And most importantly, make sure utilities are transferred to their name. Ask for account numbers prior to giving out keys.
If they paid utilities directly to the owner, still try to recoup the money, but don't hold your breath. Let them know if they don't pay by x date, you'll send their account to collections. Send it to collections and move on.
Thank you all! I was able to talk to the utility company, and they confirmed that I am not responsible for any of the payments. As for the new tenants, I will consider looking for someone else, but i am in a unique circumstance.
I live in a college town, and the Unit B is currently rented out to a family. I am waiting until the end of spring to fix up the property, which is when my tenants’ lease will end. They have not missed a payment yet, and as long as their family passes a screening, I think it will be my best option because they are okay signing a 7 or month lease.
The house I’m not in great shape as of right now, and I think it will easiest to renovate the whole property at once over the summer, I’m not doing much work, but I will make it better for students.