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Updated over 2 years ago on . Most recent reply

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Calvin D.
  • Investor
  • Canada
2
Votes |
11
Posts

How to Charge Utilities for an Up/Down Duplex with One Meter

Calvin D.
  • Investor
  • Canada
Posted

I'm renewing the leases for a duplex that has 2 units: upstairs (3 bedroom, 3 people) and basement (2 bedroom, 2 people + 3 pets). There is one meter for both units. The strategy I have been using as recommended by my tenant placement service isn't working for me with the current higher utility costs (I won't clutter this question with an explanation of it but can do so if helpful). How do people in this position administrate utilities? Should I have the bill in my name, show to tenants when it arrives and have them pay me 2/3 and 1/3 of the bill? Have it in one of their names and get them to tackle it? I know there will be pros and cons to both but if anyone has a strategy that is really working for them, I'd love to know about it. 

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Kevin Sobilo#3 General Landlording & Rental Properties Contributor
  • Rental Property Investor
  • Hanover Twp, PA
3,251
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3,049
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Kevin Sobilo#3 General Landlording & Rental Properties Contributor
  • Rental Property Investor
  • Hanover Twp, PA
Replied

@Calvin D., You didn't state which utility.

You may wish to check your local laws on this. In the United States many states would not allow you to force a combined utility bill into a tenants name or to even split it on a prorated basis. I'm not sure what laws in Canada are like but they may be similar. There are some methods for utilities such as water to measure and split the usage but again doing so and billing tenants back may not be legal everywhere.

I would bake it into the rent. If the bills increase I would adjust the rent when the leases are up.

I might also consider leasing to new tenants based on a formula. For example $1000/month rent plus $20/month per person for occupancy exceeding 3 people. So, if you have 5 people in a unit, the rent would be $1040 to account for the additional utility usage. 

The other option is to separate utilities so there are multiple meters.

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