Tenants around the country may be surprised when they move into a new rental and find out that they have to pay the monthly water bill. The reality is that unless otherwise stated in the lease, the water bill and or sewage bill counts as a utility meaning the tenant is responsible for paying it. As utility costs rise across America, more landlords and property managers are not including water and sewage use as part of the rent.
While landlords may be happy to pass on rising water and sewage bills to tenants, they should be aware of the risks involved. Since cities generally own water and sewage utilities, the city has the power to put a lien on a property if these services are not paid. Furthermore, cities rarely send out two versions of the same utility bills so landlords may not find out their property’s water bill has not been paid until they receive a property lien, or their tenant moves out. Landlords around the country have reported being footed with tens of thousands of dollars in utility bills once tenants have moved. Often it can be time-consuming and expensive to attempt to recover money from tenants once the move out of a rental property. Therefore, it may be prudent to include the average water bill cost in rent rather than rely on your tenants to pay for it.
However, if you still feel like tenants should cover the water bill you may be able to ask your utility company to notify you if the water bill is more than 30 days overdue. Some states will even let you add a clause to the lease allowing you to keep the security deposit until all utilities are paid. If you are a landlord or property manager, you need to weigh the pros and cons of covering or not covering certain utilities like water. While tenants that have to pay the water bill may be more frugal in their use of water, it only takes one tenant to skip out on a large utility bill for you to lose thousands of dollars.
If you decide to pay for water and other services you should ensure you have a property management system that has features to track monthly utility usage and costs. RISSOFT property management software has energy management capabilities that enable landlords and property managers to produce detailed reports on consumption and costs which can help identify trends landlords need to target to save on utilities and increase monthly profit.
This post is provided by RISSOFT Residential and Commercial Property Management Software, specializing in innovative and cutting-edge property management software for all 50 states. Request a demo or contact us today to receive more information.
Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.