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Updated over 2 years ago on . Most recent reply

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Ross Baggay
  • Rental Property Investor
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Raising Rent In Norman Oklahoma

Ross Baggay
  • Rental Property Investor
Posted

I am renting out a house I own in Norman Oklahoma. I currently have tenants in place with utilities included in their lease. They have been using much more electricity than I expected. My question is: am I able to raise the rent to account for the additional electricity costs or would I need to wait until the lease expires? They currently still have about 6 months left. Local investor replies would be greatly appreciated!

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Nathan Gesner
  • Real Estate Broker
  • Cody, WY
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Nathan Gesner
  • Real Estate Broker
  • Cody, WY
ModeratorReplied
Quote from @Ross Baggay:

I am renting out a house I own in Norman Oklahoma. I currently have tenants in place with utilities included in their lease. They have been using much more electricity than I expected. My question is: am I able to raise the rent to account for the additional electricity costs or would I need to wait until the lease expires? They currently still have about 6 months left. Local investor replies would be greatly appreciated!


You cannot legally change the terms of a lease during the lease, unless both parties agree. 

My recommendation? Pretend you don't know better. Send them a short letter that the rent included electricity up to $XXX. Because they've regularly exceeded that, you'll need to increase their rent to $XXX to cover the excess use. Include the last few electricity bills as evidence. Ask them to sign the document acknowledging the increase and the start date of the new rate.

If they sign it, you're golden. If they don't, stick with the existing terms until their lease is over, then move them out and start fresh. At least it's not that expensive of a lesson to learn.

In the future, make Tenants establish their own utility accounts and pay the utility provider directly. If that's not an option, consider passing the utility charge to them each month by receiving the bill, adding the charge to their rent, and providing the tenant a copy of the utility bill as evidence. If you insist on including utilities with the rent, I recommend you include a clause that says:

"Advertised rent rate includes ordinary utility use, up to an amount not to exceed $XXX. If any single utility bill exceeds $XXX, Tenant agrees to pay the difference."

  • Nathan Gesner
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