How to list utilities in lease during transition

[Arron Achey]

Hello all,

Quick preface to question, I have a current tenant who wants to renew and I would like to renew her as well. I have a current duplex running on one electrical panel and looking to have it split as previous tenants have had complaints due to splitting electric evenly when usage wasn't even.  Previous owner paid some of utilities for tenants up to a cap so they definitely ran it up. Earliest someone can come out is early February and this is when the tenants lease is up.

Question is how would you structure the lease, specifically utilities, when the electric may not be officially split come time of renewal?  I'm still splitting water evenly, gas just on one unit as the other doesn't use any, but electric I'm stuck on finding the right verbiage. Maybe I'm overthinking it, either way any input is appreciated thanks!

[Michael Garofalo]

Hey Aaron,

I 100% support the decision to split the electric, as that is the legal and most fair way to do things, and will increase the desirability of the property whenever it comes time for you to sell. However, I want to preface this by saying this is definitely not a small undertaking in terms of cost or work involved, and will most definitely require permits and inspections with both your municipality and the power company.

Specifically for the electric service, my recommendation is to upgrade to a 3-gang meter socket: one meter for each unit and then one for common area electric. Even if you have no common area utilities now, it would be more economical in the future if you ever wanted to add another panel to cover miscellaneous common area lighting, CCTV, etc. If the existing service panels is in good shape and is sufficient for one of the units then I'd try to avoid replacing that. If things are overloaded you may want or need to consider upgrading to 200 AMP service however in my experience, 100 AMPs per meter should likely be fine.

As far as the lease renewal goes, I would just talk to your attorney and work in a clause that covers you for whenever the cutover may occur. Something along the lines of "landlord reserves the right to install additional electrical panels and separately meter the electricity...yada yada yada." I actually did this a few years ago with water (I submetered the units and wrote into the lease that there was a flat charge per person but that I reserve the right to install submeter devices at any time and then bill tenants accordingly).