Property Management Blog

How Can Landlords Avoid Paying Tenants' Outstanding Utility Bills? | Columbus Property Management Advice

Mitch Deminski - Friday, May 31, 2019

How Can Landlords Avoid Paying Tenants' Outstanding Utility Bills? | Columbus Property Management Advice

One of the most frustrating things that landlords in Columbus complain about is overdue utility bills being left behind by tenants and ultimately becoming the responsibility of landlords. It’s not fair. The tenants are the individuals using the water, electricity, and gas, and most lease agreements indicate that they are responsible for paying those utilities.

With electric and gas bills, tenants set up accounts in their own name, and landlords need to trust that the bills are being paid on time. At the end of the lease, if there are overdue utility bills, landlords can simply withhold the outstanding amount from the tenant’s security deposit.

Water bills are a little different, and we’re focusing on those today. We have some tips that may help you ensure your tenants pay responsibly and reliably every billing cycle.

Columbus Water and Sewer

Columbus Water and Sewer has an excellent reputation and a AAA Bond Rating which is due to excellent collection procedures. The higher a city’s bond rating, the lower the interest rate that city has to pay. So, Columbus has a stake in keeping their AAA rating. Therefore, if tenants don’t pay outstanding water and sewer bills, the responsibility immediately shifts to the property owner. This keeps our public services as some of the best in the nation, and even if doesn’t seem fair, things are unlikely to change anytime soon.

Put a Water Agreement in Place

At Solutions for Real Estate, we require all of our tenants to sign a Landlord/Tenant Water Agreement. In this agreement, the tenants promise to pay all water and utility bills on time. Tenants aren’t permitted to move into the property until this agreement is signed along with the lease agreement. This agreement is immediately referenced any time the water bill is late or a shut off notice arrives. We are notified of late payments and threats to shut off the water, so we’ll know if tenants are violating the agreement. When this happens, we refuse to accept any rent until the account is brought current. We consider it a partial payment, and we refuse to take it.

This creates accountability and consistency for our tenants. They know we take the water bills just as seriously as we take rent payments. We are notified of service interruptions, and we consider it a lease violation which will be acted on accordingly.

Additional Utility Payments

Additional Utility PaymentsThis process can be used for any utility payments. Landlords and Columbus property managers can follow the billing and meter readings for gas and electric as well. If you want to make sure you’re not stuck with a large utility bill after a tenant moves out, make sure your lease agreement reflects the tenant’s responsibility. You can refuse to accept rent if these accounts are not up to date. Make sure you utilize the security deposit as well. Get in touch with the utility companies after a tenant moves out and make sure the accounts are current. If they’re not, pay the bill and then charge that amount to the security deposit.

This is one of the things we do to protect our landlords and their investment properties. If you have any questions, please contact us at Solutions for Real Estate.