Investor · Manasquan, NJ · Member since 2019 · 70 posts · 38 votes
I'm in the process of gathering applications to rent my recently renovated duplex in Point Pleasant, NJ. My initial plan was to simply have tenants pay Rent + Utilities. I showed the property the other day and a tenant asked if I would be paying for the water bill? I said I wouldn't be since the duplex has all separate meters for each unit for all utilities. The tenant said "Oh, just so you know the water company will put a lein on your house if the water bill isn't paid" - This caught me off guard. I looked it up and the tenant was right.
My Question: How do you handle utilities? Do you pay for the water bill and just have the tenant pay you back? Do you include a flat rate in their rate to cover the average water bill and eat the difference?
@Richard Phillip Lewis while this is true the tenant knows this how? That would be my concern. I would have utilities in the tenants name and also have a clause in your lease to cover non-payment. Inn my area. that is saying that unpaid utilities become additional rent.
@Richard Phillip Lewis while this is true the tenant knows this how? That would be my concern. I would have utilities in the tenants name and also have a clause in your lease to cover non-payment. Inn my area. that is saying that unpaid utilities become additional rent.
Different municipalities have different policies. In my municipalities, the utility bill stays with the tenant when it's under their account. Even when the tenant moved out and didn't pay their last bill, our municipalities chase after the tenant (or the account with the person's SSN). In the past my lease had a clause that in order for the tenant to get their security back, they have to send me the paid receipt of their last utility bill. It was a clause I borrowed from a lease that was from a different area. After I learned how my municipality does business, my lease no longer has that requirement.
Usually if the tenants don't pay utilities, the company will shut it off. So if they want water/power, they have to pay.
I guess if your municipality puts a lien on your property before they shuts off the utilities, then maybe you do need to take control of it and bake that into the rent.
The tenant is right, but the fact that they said that would be a red flag for me. You can request a copy of an up to date statement every 2-3 months from the tenant to ensure the bill is paid or you can pay it and have them reimburse you. I have to do the latter for 2 places as the water company won't put the water in the tenant's name.
It appears that they are hesitant to take responsibility for the water bill! Per my lease agreement, tenants are responsible for transferring all utilities to their name before moving in. They are also responsible for ensuring that all services remain active throughout the lease term.
In Las Vegas the water and the trash/sewer/recycling can all lien your property. There’s still no reason for me to pay it. When I get a letter saying they plan to lien a property because amount $xxx is owed, I pay it that day with a credit card and add it to the amount due on the first of the month. Hasn’t been a problem.
BTW: You probably should have already known this. That being said I would probably get a double security deposit (if allowed in your market.) or pass on any tenant that knows it.
I have similar situations with my rental in WA. The utility companies will hold me accountable if the tenant does not pay. I have the necessary clauses in my lease agreement to reflect.
I have the tenants place and pay all utilities in their name. Should they not pay, I go after the tenant if it makes financial sense.