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Landlord Tips on Utility Abuse

What Do I Do if the tenant abuses the utilities that I pay for?

I never recommend having your tenant's utilities in the landlord's name. BUT, if the tenant is on an LPA lease that allows you to issue a Notice of Change of Terms or a month to month tenancy, you may have the power to do something about it. When your tenant abuses utilities that are included in the rent, you should alert the tenant that the utility bills have reached excessive levels and the tenant will be billed the overage amounts or the utilities will be paid by the tenant in the future. A lot of this should already be addressed in the lease. If it isn't, you left the door open to problems.

I realize that in many cases we are dealing with multiple family homes with split utilities on single electric meters and shared heating systems and water (that's why you as the landlord have the utilities in your name - right?)- so in that case it is more complicated.

A more and more popular way to handle the spliting of utilities is set up in the lease before the unit is rented.

Monthly Utility Rebate in the form of a discount

This is mostly used in 2 family rentals where the utilities are in the main tenant's name, whose rent is discounted the amount representing the estimation of the other tenant's utilities. Of course, the landlord has already inflated the rent on the lease in order to compensate for the discount, but the lease must reflect that the tenant receives a $XXX. monthly discount in order to comply with any shared meter laws (if any), or just to show the main tenant that he is being more than fairly compensated. The secondary tenant has the utilities included in the rent.

This rebate method eliminates the squabbling of tenants that commonly occurs when splitting the monthly utility bills.

Again, if you have a month to month rental agreement, you can change any terms you like with a 30 day Notice of Change of Terms.


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