Utilities Move to Landlord THEN Tenant?

Question

Just acquired two investment properties - The Sellers are moving out soon, and there are some repairs to be done. Is it recommended to move utilities to my name, then move it to the tenants name (they’re paying once I get one), or should I just let the utilities turn off and have the tenants turn them on under their own name?

Looking for best practice here/what others do. Thanks.

Jennifer T. · Answer

I've done it both ways, though more in terms of "between tenants". If a tenant has moved out and I don't have another one lined up yet, I put the utilities in my name. Because, when I show the unit to prospective tenants, I want it to be a comfortable temperature (a/c or heat on), rooms lighted, and that everything is functioning. However, I've also had the occasion where I've had a new tenant ready to go before the previous tenant moved out. In those situations, I've advised the outgoing tenant to make sure they turn off their utility accounts as of X date and advise the incoming tenant they'll need to get their utilities turned on before their move-in date or they might end up having a few days without them.As a general rule, I only have utilities in my name while the house is vacant.

Michael Noto · Answer

@Aaron Moayed You will want to transfer them into your name from the previous owner because you will likely need at least power to complete the work you need to do before renting the unit out. Also, for showings prospective tenants will probably want to see that the lights work. Not to mention, transferring utilities is a lot smoother process than letting them get turned off and the utility company having to come back out and put them on. That could take a week in some cases depending on how busy they are.

Greg M. · Answer

See if your utility has a landlord account that allows the seamless switch between owner and tenant. The utilities are uninterrupted and there is no added cost or wait time for disconnect/reconnect. The only drawback for this is that the tenant can close their account and you'll start getting the bill, but obviously that only happens with a deadbeat tenant.

Kim Meredith Hampton · Answer

I would turn them on in your name once the seller has vacated, then leave them on until it gets rented. Make the new tenants show proof they have turned them on into your name on or before their move in date, but always schedule them off before they move in. In Florida, we aren't allowed to turn them off once the tenant has taken occupancy, crazy but true!!

JD Martin · Answer

This is what I do. When someone moves out/turns off utilities, they automatically transfer to our name. When we get a new tenant, it is made clear that keys are not delivered until utilities are verified - it takes about 30 seconds to call the utilities and verify the tenant has put water/electric/gas in their name. Our lease requires they keep all utilities on and in their name for the entirety of the lease. If someone takes it out of their name, it goes right back into our account, and I get a bill and I can see the effective date of utility transfer. If it was done early, we just deduct out of the deposit any charges to the end of the lease (assuming it's the end of the lease). We've never had anyone take utilities out of their name during the lease, because we would then just begin eviction proceedings if necessary (and turn utilities back off out of our name).

Matt Pastier · Answer

@Aaron Moayed Congrats Aaron! In addition to what others have said, also talk to your utility companies about what happens when a tenant moves out. In my area, I can fill out a form so that utilities automatically revert back to me when a tenant moves out. The benefit is that I am not charged extra fees to have them put back in my name.

Brandon Roof · Answer

While completing the repairs, I'm assuming you may need access to lights, water and possibly climate control, so you'd need to get the utilities in your name during this period.You may even want to backdate the service to the date you became legal owner because you could be currently racking up some costs if the A/C is kicking on or you have a leak anywhere.

Kenny Dahill · Answer

I typically transfer electric to my name. Nobody wants to walk through a 90 degree rental during the summer.I'll leave water and gas turned off. If I need water, I have a 5-gal bucket that can be used for cleaning. Also, typically water takes longer than electricity to turn off from my experience.