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Updated almost 5 years ago on . Most recent reply

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109
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Kyle Smith
  • Rental Property Investor
  • San Diego
87
Votes |
109
Posts

Utility payback before rent collection

Kyle Smith
  • Rental Property Investor
  • San Diego
Posted

A renter in one of my units is late on paying his utility bill. Actually, my property manager pays it each month and then bills back to him. He’s been late paying it back for the last two months.

My question is if it’s legal to just apply his rent to paying the utility bill first and then charge him a late fee for rent if he’s late paying that after? Only asking because I don’t know if it’s legal to charge a late fee for utilities, but could be wrong. Anyone have experience here? Thanks in advance!

Most Popular Reply

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Lynn McGeein
  • Real Estate Agent
  • Virginia Beach, VA
1,554
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2,714
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Lynn McGeein
  • Real Estate Agent
  • Virginia Beach, VA
Replied

Ask your management if they have a lease term that covers application of payments and add one if it doesn't.  In my area, utilities are in tenant's name and tenant responsibility, which is how it should be having been stuck before with tenant water bills in WA and MD.  My lease has a clause that I could add utilities to if needed:

APPLICATION OF PAYMENTS: ​All payments made by Tenant to Landlord after the tenancy commences, no matter how designated by Tenant, will be applied as follows: First to any outstanding amounts due by Tenant to Landlord for damages/repairs; Second, to any outstanding service charges and fees from prior months; Third, to any rent outstanding from prior months; Fourth, to any service charges or fees due in the current month; and lastly to the current month's rent.   

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