What happens if my tenant doesnt pay their utilities

Question

I make sure to put in my lease that tenant pays all utilities, what would happen if they stopped paying? would I have to pay the utility company myself? If so, how can I work around this to where I would not have to make up for their payments

Peter Holland · Answer

As long as the utilities are in their name and not yours then they should be responsible for the unpaid balance. I make sure they transfer the utilities into their name within their first 7 days of their lease. I've had tenants move out with an overdue balance with the local utility company. The new tenant had to show their lease to prove they now live there in order to transfer it into their name. The past due balance was still owed by the previous tenant and I was never contacted by the company.

Julie Hartman · Answer

@Jayden Hamilton I think much of this depends on how it works where the property is located and the local utilities. In many places, the water company can place a lien on the property if it goes unpaid. Many utilities will also issue a shut off notice and proceed with a shut off if bills go unpaid. We get copied on all utility bills for the properties we manage so we can monitor things. I would contact the local utility providers for clarification and go from there.

Alecia Loveless · Answer

@Jayden Hamilton In my state it varies town to town and utility company to utility company.

In my SFH the water and sewer have to remain in my name and I pay the bills but I can charge the tenant the cost of the bills after the fact.

The electric in this particular town I can put in the tenants name and have shut off when they leave, or I can have it return to my name if they turn it off. I’ve chosen the option of turning it to my name because if it gets cut off in the winter my heat won’t run.

Theresa Harris · Answer

Call and find out.  For some (eg water), yes you would have to pay.  for others, no.

Scott M. · Answer

This 100% depends on the local utilities and cities and what programs they offer.  In some states water follows the house not the person.  In some of those states some cities offer programs that landlords/tenants can use to make a tenant responsible.  in some cities it doesn't matter what the lease says the owner of the property will ultimately be responsible.

You need to learn what your local laws are regarding this and what your local utilities and cities (for water) do in the case of a tenant not paying.  In that case you need to go after the tenant.  Or you pay it as it comes due and deduct from rent and your lease explains this.  Or you monitor it close.

Turn a blind eye to this in some cities is a quick way to kiss a decent % of cashflow away.

Name the city and state and you might get some local experts to chime in and help.

Gail K. · Answer

If tenants don't pay utilities they typically get notices of cut offs and end up sitting in the dark without...literally...a pot to pee in.  And as others have said whether a landlord is responsible for these bills depends on the policy of the local utilities; some places try to find the person with "deep pockets" (i.e., the landlord) to pay these bills.  My area does not.  A simple call to your local utility company (water/power/gas) should answer these questions for you.

I have found that folks who fall behind paying the utilities also tend to be late (or skip) rent payments.  These things tend to go hand in hand.  So if you have such tenants be aware that when they finally move out you may have a heck of mess in bathrooms (ask me how I know this).

In my area we have some properties that are covered by Georgia Power; others that are covered by a local cooperative utility.  It's not unusual that an applicant may ask which one covers the property; Georgia Power is a big more generous letting the bills accumulate while the local cooperative cuts off power very quickly.  Applicants who ask me about that provide an excellent screen out for me on how good they are paying the rent on time.

Gail

Austen Mueller · Answer

what state are you in and whos name are the utilities in?

What happens if my tenant doesnt pay their utilities

Most Popular Reply