Tenants Not Paying Sub Metered Property

[Steven Scott]

Hello BP Community.

I am in talks to purchase a 20+ unit apartment building in So Cal for 1,450,000. 

I went over the property operations and agent just disclosed units are sub-metered for electricity.  Agent said that people are paying rent but they are having a problem with people not paying their portion of the electric bill. Usually over the summer when the AC is on.  In fact 5 tenants are multiple months behind owing $300+.

Does anyone have experience with enforcing the submeterd apts bill? Can you cut off their power? How easy is it to evict a person if rent is up to date, but electric is not paid? What about tenants then questioning the bill, saying its inaccurate?

Any insight would be very appreciated!

[Rob Harris]

Also remember; these laws are mostly governed state, but @Account Closed is spot on! 

Get with a real estate attorney to give solid advise as how to proceed. Always a good idea to try and take you, the owner, out of the equation in these types of situations when possible. Put the onus on the experts is these dicey specified areas. 

I'm getting ready to build a bunch of Apts in rural TX and walking through hours to set up the utilities and billing situation now.... 

[Steven Scott]

Thanks for the input @John Anderson. I would love to rewire and have each unit separately metered but initial rough estimate of $80,000 - $100,000 has scared me.  I'll probably ask to lower the price to compensate but I cant imagine seller lowering $100,000 more.