Tenant Arbitrarily Paying Reduced Rent Per Claims of Excessive Electric Bills

[Bill Bell]

I have an up/down rental where the upstairs tenant is responsible for the electric bill.    Over the past two months, the electric usage has been high and they have been arbitrarily deducting from the rent payment what they felt was necessary to offset the high bill.  I let it slide the last month ($60 deduction) as there were some contractors at the property to fix some minor issues; however, the latest bill for Sept was $50 higher than Aug causing them to shave $100 off the rent they paid.  

Additionally, in review of the elec bill:

July:  798 kWh

Aug:  1814 kWh

Sept:  2244 kWh

They occupied the property full term though those three months, yet a three-fold increase seems negligence to me.  Note, the upstairs host the central HVAC unit which is the core power draw, along with a 7 person hot tub.  

Note, I have had past issues with them, as they have been unhappy at the property for issues ranging problems with the neighbors, to claims of mold in the HVAC.  The female in the couple is a definite "alpha" personality type who thinks she "is always right."  Additionally, she resides at the property 24 hrs per day with a home based business.

All in all, not sure how to handle this one.  Should I hold their rent check (which is short $100), and contact them informing they are short and require full rent payment on/before due date, or should I allow the $100 deduction and more closely eye the property over the next month to look for signs of negligence such as leaving windows open while HVAC is running, or leaving exterior flood lights on 24 hrs per day?  Note, the property is only a few minutes from my house.

[Steve Babiak]

I'm not sure about how "foreign load" utilities are handled in the state where this property is, but if it were in PA, you would be in for a surprise - you would get to pay the entire electric bill.  See this thread for further reading about that; you might want to read it since it would not surprise me that other states do likewise:

http://www.biggerpockets.com/forums/52/topics/1073...