Realistically, can I make tenants pay for Water and Sewer?

Question

Cleveland Water is now billing clients monthly versus quarterly. Is this our opportunity to opt out of paying these bills? I'm talking about low income housing. Are any Cleveland Investors making tenants pay ALL utilities? It seems that most applicants expect the landlord to pay these bills. It would be a lot easier to analyze a deal and recognize cash flow If I can rent units without accounting for utilities. I HATE utilities more than any other expense because they fluctuate. On one property I pay $52.00 on average for Water and sewer per month.  On another property the bill is sometimes as high as $300 combined. I am looking into Fixed Utility Rates.. I am just curious, what are you guys doing?

James Wise · Answer

@Joshua Hollandsworth No your going to have to carry that burden. I've actually had to answer this question so many times over the years we had to put a FAQ on our website addressing how we handle it. See below from our FAQ. You as a private landlord who is self managing would be well served to handle it the same way we do at Holton-Wise. We've gone through every scenario on this type of stuff & this is the most effective way to handle it.

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Q. I would like to charge the tenants for water and sewer. Will you bill my tenants?

A. No. The City of Cleveland, Division of Water will not pass water and sewer charges onto any individual other than the property owner. The water and sewer bill will ALWAYS remain in the Owner’s name therefore the ultimate responsibility of the water and sewer bill will ALWAYS fall onto the Owner.

See http://www.clevelandwater.com/customer-service/faq for more info.

Holton-Wise does not charge the tenants for water and sewer usage because of all the legal difficulties put in place by Ohio Landlord Tenant Law and the City of Cleveland, Division of Water. Holton-Wise recommends building water and sewer costs into the rental price because evicting for non-payment of a utility that is not in the tenants name is much more difficult than evicting for non-payment of rent. If the Owner wants to pursue an eviction case against a tenant for non-payment of water and sewer bills The Holton-Wise Property Group will have to refuse all future rental payments from the tenant and that Holton-Wise DOES NOT guarantee victory in any court case. Odds are very good that the Owner may lose the case. In the event of a lost eviction proceeding Holton-Wise will still bill the Owner for the normal eviction costs.

5321.04 Landlord obligations.(A) A landlord who is a party to a rental agreement shall do all of the following:

(1) Comply with the requirements of all applicable building, housing, health, and safety codes that materially affect health and safety;(2) Make all repairs and do whatever is reasonably necessary to put and keep the premises in a fit and habitable condition;(3) Keep all common areas of the premises in a safe and sanitary condition;(4) Maintain in good and safe working order and condition all electrical, plumbing, sanitary, heating, ventilating, and air conditioning fixtures and appliances, and elevators, supplied or required to be supplied by the landlord;(5) When the landlord is a party to any rental agreements that cover four or more dwelling units in the same structure, provide and maintain appropriate receptacles for the removal of ashes, garbage, rubbish, and other waste incidental to the occupancy of a dwelling unit, and arrange for their removal;(6) Supply running water, reasonable amounts of hot water, and reasonable heat at all times, except where the building that includes the dwelling unit is not required by law to be equipped for that purpose, or the dwelling unit is so constructed that heat or hot water is generated by an installation within the exclusive control of the tenant and supplied by a direct public utility connection;(7) Not abuse the right of access conferred by division (B) of section 5321.05 of the Revised Code;(8) Except in the case of emergency or if it is impracticable to do so, give the tenant reasonable notice of the landlord's intent to enter and enter only at reasonable times. Twenty-four hours is presumed to be a reasonable notice in the absence of evidence to the contrary.(9) Promptly commence an action under Chapter 1923. of the Revised Code, after complying with division (C) of section 5321.17 of the Revised Code, to remove a tenant from particular residential premises, if the tenant fails to vacate the premises within three days after the giving of the notice required by that division and if the landlord has actual knowledge of or has reasonable cause to believe that the tenant, any person in the tenant's household, or any person on the premises with the consent of the tenant previously has or presently is engaged in a violation as described in division (A)(6)(a)(i) of section 1923.02 of the Revised Code, whether or not the tenant or other person has been charged with, has pleaded guilty to or been convicted of, or has been determined to be a delinquent child for an act that, if committed by an adult, would be a violation as described in that division. Such actual knowledge or reasonable cause to believe shall be determined in accordance with that division.(10) Comply with the rights of tenants under the Service members Civil Relief Act, 117 Stat. 2835, 50 U.S.C. App. 501.

(B) If the landlord makes an entry in violation of division (A)(8) of this section, makes a lawful entry in an unreasonable manner, or makes repeated demands for entry otherwise lawful that have the effect of harassing the tenant, the tenant may recover actual damages resulting from the entry or demands, obtain injunctive relief to prevent the recurrence of the conduct, and obtain a judgment for reasonable attorney's fees, or may terminate the rental agreement.

Irina Belkofer · Answer

If you have separate meters - they do pay.

You just bill them yourself because water/sewer can't be transferred to Tenants.

All my tenants pay water and sewer

If you don't have meters, you can include some fixed amount as additional to rent, however, it makes your rent higher and less competitive

Austin Donnelly · Answer

Joshua,

Have you considered billing the tenants for water consumption instead of putting the water in their name, or do you think this will add to much hassle to your management system?

I am looking to purchase my first multi-family soon, and I learned quickly that utilities can ruin a deal quickly and quietly. Any knowledge is much appreciated!

Austin

Realistically, can I make tenants pay for Water and Sewer?

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