As a landlord, you may have a lot of questions about how to manage a rental property and the many financial obligations that come with it. One question that comes up a lot is “Do landlords pay for water, or do renters pay for water?” Knowing your options and responsibilities when it comes to utility payments, like water and sewer, can help you better determine who pays the water bill, landlord or tenant, for your rental property.
You, as a landlord, must care for your property. That involves making sure that the property always has access to important utilities, like water, sewer, and electricity. However, you don’t always have to have these bills in your name.
You can also have your renter paying the water bill while renting the property. Before they move in, they’ll work with the local water department to set up an account and register the unit’s water services in their name. Then, the renter will be responsible for paying the water bill while they live in the apartment or house.
Ensuring a rental property always has access to necessary utilities does mean that you, as the property owner, are responsible for paying for utilities until a new renter can move in and take over paying for you. This is to make sure the interior utility systems stay in working order. This is especially true for rental properties that experience cold winters — where running water can keep pipes from freezing and bursting — or hot, humid summers — where electricity means air conditioning is maintaining the property’s carpets, flooring, cabinetry, and many other features.
The answer is yes. In fact, it’s common for a landlord to keep the water and other necessary utilities in their name and add the utility charges on top of the rent balance. There are a few ways you can charge your renters for water and other utilities:
In addition to rent, charge renters the exact bill amount for that month’s water bill. You can forward a copy of the water bill with your rent balance notice so renters are confident that you’re charging them fairly. This step can make your bookkeeping records more accurate and demonstrate your honesty and good reputation.
You may own or manage a property that has multiple renters but only one shared meter. Or, you may share the meter with a renter on a property you also occupy. In these situations, consider splitting the bill down the middle and charging renters for their portion. You can also share a copy of the bill with renters in these situations to promote transparency.
You can get an estimate on how much water and other utilities will cost, on average, per month and add that on top of what you charge for rent. Or, you could put the house on a specialty payment plan that charges you the same amount each month for water or another utility and add that charge on top of rent.
This can be a nice perk for renters in areas that see a lot of variable weather, and consequently variable utility bills, throughout the year. It’s also more convenient for renters to not have to handle getting the water bill in their name, paying for it each month, and then having to cancel the account when their lease is up. Consider this step if you’re looking to improve the marketability of your rental.
You may also be wondering, “Do renters pay water bills they didn’t pay while living in a rental?” If you have the water (and other utilities) in your name and a previous renter doesn’t pay these fees according to your agreement, then you may be responsible for paying. In this case, you may be able to seek legal action against this previous renter if your rental agreement included clauses about paying these utility fees directly to you.
If your previous renter had the water and other utility bills in their name and they didn’t pay them before the lease ended, then you may have to cover the water bills for tenants who don’t pay. However, this depends on the state in which your rental property is located. For example, some states may allow landlords to include clauses in rental agreements that explains how the security deposit will not be returned until all utility bills are paid in full.
Use the following tips to help you determine who should pay for what utilities for your rental unit:
Check other listings in your area and see whether other landlords are bundling utilities with rent or requiring renters to pay all or certain utilities. Following the leader in this case can actually keep you competitive in the market.
Sometimes, charging rent plus utilities may cause the rent to go too far above market price, which could reduce the number of interested renters and increase your unit’s turnover. And if it does take you too far over market, it may be best to mention that renters are responsible for utilities in the rental listing so applicants know right away.
In many states, landlords who do share responsibility of the utilities, like water and sewer, will split them up as such: landlord pays for water, sewer, and trash collection, while renters pay for cable, internet, electricity, and natural gas (if applicable).
If you aren’t sure of your state’s laws regarding landlord responsibility related to utilities, consult a landlord-renter lawyer for more information about your specific situation. Knowing the answer to this and other important questions as a landlord can be the key to running a compliant and comfortable rental property.
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