Should I have utilities in my name or my tenants name?

Question

I have a duplex which has gas and electric separate (2 furnaces and 2 electric panels) and while the water is for the whole property.

I was wondering how I would go about setting this up for my lease? I will have to keep the water in my name but I was also just thinking of keeping the electric in my name as well since there is just one dryer and I don't want one of my tenants to have to pay for the other one's dryer usage.

Should I just keep everything in my name and send them each the bill separately or should I have as many utilities in their name as possible? How do I handle the water being in my name as well? Would I just split it in half and make each tenant pay their share and how would I set that up in the lease?

Any info is appreciated if you need more info to clear things up I'll do my best to provide that.

Thank you!

Lynnette E. · Answer

I would put the electricity in their names.  Once you get that tenant that does not pay the rent and you have to keep paying their electricity as you go through the eviction process you will understand that you should always pass the utilities on to put in the tenant's name as much as you can.

In the duplex with the dryer state that the rent was set with consideration that that tenant would be paying for all of the electricity for the dryer use, including the use for the other unit's tenant.  Just be very clear that this tenant is paying for the electricity, so that they can not sue you later over that issue.  And for the other side of the duplex you will need to state that they can do up to maybe 20 dryer loads a month.  Make it so that there is enough capacity for them to do their laundry, but not so much that the dryer becomes a weapon between the 2 tenants if they do not get along.  And put that in their lease, and also state that the reason is because the electricity for the dryer is billed to the other tenant.

Estimate how much the water bill will be and then make the base rent high enough to include the water.  Put in the lease that you pay for a 'reasonable' amount of water.  I would recommend this rather than splitting the bill and trying to collect that amount each month.  Its not worth trying to collect it each month, the time and hassle, for the little amount of difference it will be over a good estimate.  Plus collecting it by splitting it evenly can lead to the 2 duplex tenants getting into wars over who is using the most and if its fair.  And often it is not fair.  Example, I have an apartment and two units share the water.  One is a traveling nurse who is only there between jigs and the other is a husband, stay at home wife, and a year old baby.  It would not be fair to split that bill.  But by having the rent at a set price everyone is happy and know what to expect.

Henry T. · Answer

Here it doesn't matter, the owner is stuck with the bills either way. Just make sure it says who pays utilities in your lease, and monitor that they''re paying it.

Lynnette E. · Answer

Wow!  I never trust tenants that much!  I am not willing to put my credit rating in the hands of a tenant.  If they do not pay or do not pay on time and the bill is in your name, your credit score will drop fast!  I like my 830 to 850 score...

Gregory Schwartz · Answer

@Lynnette E. has great advice. 100% the best option.

@Alec Jacobs to jump in about the washer / dryer. In my market having a washer and dryer in the building or even better in the unit is worth $100+ per month in rent. I would leave hem accessible to both units but really consider adding a second set of connections for a washer and dryer in the other unit

Good Luck!

Alecia Loveless · Answer

@Alec Jacobs Agree with trying to add a washer/dryer to the second unit. I put a stackable unit in one under a staircase. It was tight but so worth it for higher rent. In my area adding a W/D also can add about $100/month if the unit is nice.

Even if you can only add an additional $50/month you will get a larger tenant pool to choose from with the W/D in the unit.

I’ve had great people repeatedly say no to my various units that don’t have W/D in them.

Dave Skow · Answer

@Alec Jacobs- for simplicity - I would keep all utilities in your own name ...if you have agreed with tenants that they are to pay the utilities - then you can forward the bills to them as well as reminding them about when they need to have payment made .   This way you can always be aware if these are being paid and monitor these bills .  IF tentnat demands the utilities in their name - thats fine too

Brandon Tusing · Answer

I would try to put as much of the utilities in the tenant's name as possible.

With my duplex the electricity is metered separately, but the water is on the same meter.  I split the water bill based on each person.  There are three people living in the duplex.  Two in one unit and one in the other.  Each person pays the same for water each month - roughly.

Hunter Stoudnour · Answer

I agree with Lynnette 100%.

Jeremy H. · Answer

We personally require proof of utilities being transferred prior to handing over the keys

I haven't yet kept anything in my name - I think if there wasn't separate utilities you may have to go that route. OR see what others in the market are doing

Kevin Sobilo · Answer

@Alec Jacobs, also in general I would try to avoid having utilities in my own name as much as possible. When a tenant stops paying you, they stop paying those utilities and the bills add up fast. PLUS, a tenant if disgruntled can abuse the utility and purposefully run the bill up to spite you. For example crank the heat up to 85 degrees and open all the windows in winter causing a $1,000 heating bill for the month!

The exceptions where you need to keep the bill in your name are when they are combined between units like your water and also utilities provided by the municipality or municipal authority. When the government provides the utility and the bill goes unpaid it can cause a lien on your property. So, trusting the tenant to pay that bill directly is a risk. In my area garbage and sewer are the most common municipal utilities but I have seen others in isolated cases.

Should I have utilities in my name or my tenants name?

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