Tenant Water Bills

[Matthew Ginsberg]

I manage rental properties in Hagerstown, Maryland. In my Lease Contract with tenants, the Lease says tenants are responsible for paying all of their utilities, including water.  Water bills come in once every 3 months and I give tenants ample notice prior to updating their accounts with the water bill charge. When water bills come in, I pay tenants water bills to the Water and Wastewater Department directly and they reimburse me the cost owed with their next months rental installment. I have to do it this way for legal reasons. A few months ago, one of my tenants stopped paying his water bills, but continues to pay rent on time. I'd like to take legal action against the tenant to collect the amount I'm owed, but I don't think I can file a small claims case, since the water bill account is in the owners name (the account must stay in the owners name for legal reasons). The tenant is breaking the Lease by not paying the water bill amount owed. What are my legal options? 

[Nathan Gesner]

Quote from @Matthew Ginsberg:

Start termination. Get them out and then use the deposit to cover the unpaid charges.

My lease says that all payments are applied to non-rent charges first, oldest to newest. If the tenant owes $1000 rent and $100 for water but only pays $1,000, then I will apply their payment to water first, then to the rent. This leaves them $100 shy on the rent payment and subject to eviction for non-payment of rent.