Security Deposit question

[Bettina S.]

More and more Utility companies make it the responsibility of the landlord when the tenant has an outstanding utility bill at move-out even so the lease mandates for the tenant to be responsible for the utilities. Has any of you set a separate deposit for utilities or asked for a larger initial security deposit to cover outstanding utility bills? Currently our security deposit is one months rent and yes we can use that to pay for outstanding utilities. We never had any issues in the past but I am looking to be prepared when something happens. Any advice  would be appreciated.

[Account Closed]

Before taking action you should get very familiar with your state's tenant-landlord laws.  The last thing you want is to find out you did something outside the law. Some states have a limit, cap, as to how much you can charge for deposits. Nevada state's limit is 3 times the monthly rent, which includes the combined total of security deposits, cleaning deposits, pet deposits, etc.

In Las Vegas, is it also common for the landlord to maintain/pay the sewer and trash utilities and charge tenants a $30-$40 monthly fee, in addition to the rent, to cover the expenses.  Here, the sewer and trash services are never shut off and they put a lien against the property when the bill is past due. Just be sure to add the charge separately in the lease.

It's pretty difficult, some would say impossible, to be prepared for all possible scenarios regarding tenants.  Time and experience will help you gain more insight as to what course of actions best suit your needs.  During this pandemic, all landlords are having new experiences with their tenants.  Hopefully the experiences, with their resolutions, will be shared here on BiggerPockets for all to learn.

You are correct in that you can take the tenant's past due utility bill out of the deposit. I've had to do it a couple of times, not enough to concern me.  If you find yourself in this situation with multiple tenants, you may consider increasing the security deposit.   Otherwise, a couple times, and the security deposit covered the expenses, I wouldn't worry about it.