Landlord supplying utilities to Tenant

[Andy B.]

Why would a Landlord want to buy utilities from the utility and then bill Tenant for the cost? I am asking mostly in relation to office/retail property but answers on apartment and even single family might help.

I can understand if the individual units cannot be separately metered, but I keep running into the situation (I represent retail tenants) where a Landlord wants the right to sell utilities to the tenant even though the building is already individually metered. I just don;t see the benefit for the Landlord since the Landlord has to set up the utility account, pay the bills and then calculate how to charge the tenant (or read the appropriate meter) and send a bill to the tenant and pursue collection.

Can anyone help me see what I am missing?

[Marcia Maynard]

On the residential side, there may be a benefit to keep the utility in the property owners name in some situations. I have no idea about commercial.

1. Short term rentals.

2. Utilities that become a lien on the property if not paid.

3. Prevention of other system failures or damage to property that might occur if utility was shut off for non-payment.

4. Renting to tenants who can not qualify for utilities in their name.

5. Utilities that have billing periods of two months or more, that will not do meter reads between tenants.

There are work-arounds for all of the above. I know of a few landlords that prefer to maintain more control over what happens with the utilities by keeping the utilities in their name and billing the tenant.