Adjusting share of utilities with tenants

[Sean Cooper]

Hello. I rent my main floor in my house to tenants. I live in Toronto, Ontario, Canada. My tenants have been good over the years. They've been at my house for almost 7 years. No issues. They've always paid the rent on time. They even do extra stuff around like the house (repairs and helping with the garden).

I haven't raised the rent since they moved in. The rent is well below market value. However, they do pay a share of utilities. They pay 60% and I pay 40%. I'm only 1 person. When they first moved in it was just the 2 of them, but now they had 2 kids and it's 4 people (wife, husband and 2 kids). I'm sure they use a lot more than 60% for the utilities. For heat it's no big deal. For hydro they're certainly using more. However, water is the real killer. They do a lot more laundry than me. They also have a lot more baths/showers. I only have quick showers and do laundry once a week. I am sure that at least 80% of the water bill is their usage, but they are only paying 60%.

My tenants offered to pay more for water this month because the bill was really high. I think I'm going to turn them down due to Coronavirus. It' s not right to take extra money from them right now. However, in the future when things get back to normal, do you think it's reasonable to ask for them to pay a higher share of utilities? What are your thoughts? Like I said, I've never raised the rent once and I could easily rent it out for maybe $200-$300 a month more than I'm currently getting. What % split would be reasonable?

[Ashwin Samtani]

I think 60-40 split is pretty reasonable as well. A big part of the bill is the delivery charge which is a fixed cost regardless of usage so it's not fair to say they're responsible for 80% of the bill.

Sounds like you might be better off raising the rent by the allowable rental guideline amount (2.2% for 2020) once this situation is all clear. I don't see anyone complaining over 2.2% increase after 7 years despite your increased costs due to inflation