Problems with Utility Agreement

[TAMI]

Dear Rein's members,

I wonder if someone has experienced the same problem in the past and can give me an advise .

I have a problem with the main floor tenant of a rental property . The basement unit has been vacant for over a month , and the tenant of the main floor is not willing to pay the 100% utility cost , and says that by the Utility Agreement he is responsible only for 60% .



He is obviously trying to take advantage of the situation , I wonder if by law , I could force him to pay the 100% of the utility bills , since he was the only one that living in the house ?



Also Can I cancel the utility Agreement between us ( no dates and terms of periods are stated in the agreement ) ?



thank you ,





Enclosed is a copy of the agreement


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Utilities Agreement





This Agreement is to outline
responsibilities for utilities payment at the following property:





Address:__________________________________________________________________________





This agreement is made
between, ___________________________________ as the landlord /principal
utilities tenant that will register their name with the utilities
company(s) and will co-ordinate payments on behalf of all parties involved AND___________________________________ as secondary utilities tenant.





 Upon receipt of the utilities invoice or billing, a
copy will be forwarded to the secondary
utilities tenant(s) by the landlord/
principal utilities tenant, upon
which time proportionate payment as described herein will be due and payable
within 5 calendar days of receipt.




 Failure to provide payment is to be treated as an
outstanding arrears amount that can be recoverable by the landlord /principal utilities
tenant from the landlord on behalf of the secondary utilities
tenant, just as if it were rent owing. (this at the sole discretion of the
landlord) It is therefore agreed by the secondary utilities tenant that
default in payment is a default under the secondary utilities tenants
lease. All other conditions of each parties Rental Tenant Agreement remain the same.




 Failure to provide payment by either party will
constitute a default under their individual Rental Tenant Agreement and
will be subject to action as outlined in original Rental Tenant Agreement
and as afforded by applicable legislation.





 The utilities portion will be split as follows:





Principal Utilities
Tenant: ___________ % Secondary
Utilities Tenant: __________ %**





Additional Items: __________________________________________________________________________________________________________________________________________________________________





**
In the case of the non-resident Landlord being the Principal or Secondary
Utilities Tenant, the utility base portion will be split as noted above,
but the `usage volumes and costs`
attributed will be born 100% by the sharing Utilities Tenant. (as the case may
be). The Landlord has the unfettered right to transfer/assign his obligation to
a new tenant occupying a space in his place.





AGREED UPON this date
______________________, 20___.








______________________________________ ___________________________________

Principal Utilities />Tenant Secondary
Utilities Tenant

 

[Sherilynn]

No, you cannot force the tenant to pay a different percentage. The court will uphold the 60%. (Been there.) That's why I don't put a percentage in my agreement, and I state that the amount is subject to adjustment periodically or at the end of tenancy.



And no, you cannot void this agreement unless you both agree on a replacement agreement, which is doubtful since this one is in the tenant's favour. There are no end dates because this is an addendum to the rental agreement, so it will only end when the lease ends or when a replacement agreement is made.



Absorb the loss, get the place rented, and alter your agreement for next time.

 

[housingrental]

Hi Tami

It seems like you are trying to take advantage of the situation, not the tenant

 

[Sherilynn]

[quote user=housingrental]Hi Tami

It seems like you are trying to take advantage of the situation, not the tenant





I disagree. While the remaining tenant should not be responsible for the entire heating bill because some of that heat is still directed to the other suite whether it is vacant or not, the vacant suite certainly isn't using any water or power (except for the few cents used while the suite is being shown).



I think it is fair for the entire power and water bill to be paid by the remaining tenant, but unfortunately the agreement won't allow for it.

 

[tsokalski]

I have to agree that the tenants agreement is to pay 60% of costs and the fact you do not have a tenant downstairs is not their fault. It costs more than pennies as the basic uncontrolled charges remain the same. I paid for electricity and water for 1 month on a vacant property $115, of which only $30.00 was actual usage, the rest is basic delivery charges.

I would suggest approaching tenant and having them pay 100% of usage and 60% of fixed charges, this would seem fair to both parties. It is however their option to accommodate.

 

[TAMI]

thank you members for the reply and your thoughts . I did talk to my main floor tenant and they decided to pay the full utility bills after I advise them about my effort and consideration to select a matching tenant profile for the basement unit , so they could continue live happily in the home .

I would like to suggest to other members to add a line to the Utility Agreement that if in a situation that one unit is empty , the other unit is the principal and the only utility user who is responsible to pay the 100% cost of utility until the other unit will be reoccupied .

 

[Sherilynn]

I suppose it depends on your area and the company you have.



Our basic (fixed) water/sewer/drainage charges are only $14.07.



Our electricity delivery charges are still based on usage. On a small, occupied 2-bedroom condo, our electricity delivery charges were $26.66 while for an occupied up/down duplex they were $42.78.



So for a fully occupied up/down duplex with a total bill of $225.47, our basic/delivery charges were only $59.69 including GST. And the bulk of those basic/delivery charges are still based on usage.

 

[housingrental]

This

And electricity usage of fridge, common area lighting, exterior lighting, hot water tank, more?

Hot water tank rental fee



[quote user=tsokalski]I have to agree that the tenants agreement is to pay 60% of costs and the fact you do not have a tenant downstairs is not their fault. It costs more than pennies as the basic uncontrolled charges remain the same. I paid for electricity and water for 1 month on a vacant property $115, of which only $30.00 was actual usage, the rest is basic delivery charges.
I would suggest approaching tenant and having them pay 100% of usage and 60% of fixed charges, this would seem fair to both parties. It is however their option to accommodate.

 

[housingrental]

This is not ethical

You are shifting costs to the tenant from landlord without providing additional rights to the tenant for the additional obligation

Please reconsider





[quote user=TAMI]thank you members for the reply and your thoughts . I did talk to my main floor tenant and they decided to pay the full utility bills after I advise them about my effort and consideration to select a matching tenant profile for the basement unit , so they could continue live happily in the home .

I would like to suggest to other members to add a line to the Utility Agreement that if in a situation that one unit is empty , the other unit is the principal and the only utility user who is responsible to pay the 100% cost of utility until the other unit will be reoccupied .

 

[Sherilynn]

[quote user=housingrental]This

And electricity usage of fridge, common area lighting, exterior lighting, hot water tank, more?

Hot water tank rental fee







Fridges can be shut off and left open. There usually is not any common area lighting in an up/down duplex. Exterior lighting is the existing tenant's choice. I think you are getting a bit too technical.



In fact, to get that technical about a fair split, you would have to have separately metered units. Otherwise you would have to set the hot water valve on each tenant's washer and limit the number of loads to 3 per week or they must pay extra. And what if one tenant doesn't want to use his dishwasher? You'd have to adjust the split there too. And so on and so on.



The way I handle my up/down's is by having a set utility amount (subject to adjustments) based on the average bills for the previous 12 months. If there is a vacancy in the other suite, the remaining tenant pays the entire electrical and water bill but only their regular share of the gas bill (which includes the hot water tank, btw).



The share of the gas bill for the vacant suite is part of the vacancy cost and is an extra incentive to get the suite rented quickly.

 

[RedlineBrett]

[quote user=Sherilynn]The way I handle my up/down's is by having a set utility amount (subject to adjustments) based on the average bills for the previous 12 months.


We are moving this way too. It has worked really well so far.



[quote user=Sherilynn] If there is a vacancy in the other suite, the remaining tenant pays the entire electrical and water bill but only their regular share of the gas bill (which includes the hot water tank, btw).


We don't do this... there is electricity required to run the furnace, light the exterior lighting and common area lighting etc. There are also almost always some fixed charges on the water bill. Waste service will also show up on there. It's not 100% consumption charges and often times (at least in Calgary anyway) they are behind on meter readings so you really have to be on top of your bills and communicating with tenants to keep it all straight. If a landlord can get their tenants to eat these charges then good on them!



We tell tenants that the fixed utility portion is there regardless of whether or not the other suite is vacant. It's a selling feature as not all landlords do that, and also so they aren't nervous if they hear someone is moving out and then also think of moving out themselves...

 

[Sherilynn]

[quote user=RedlineBrett]

We don't do this... there is electricity required to run the furnace, light the exterior lighting and common area lighting etc. There are also almost always some fixed charges on the water bill. Waste service will also show up on there. It's not 100% consumption charges and often times (at least in Calgary anyway) they are behind on meter readings so you really have to be on top of your bills and communicating with tenants to keep it all straight. If a landlord can get their tenants to eat these charges then good on them!







A lot of this was covered in other posts above. In Edmonton there are very small fixed charges for water/waste ($14) and then variable delivery charges. Why shouldn't the tenant using the utility pay the entire delivery charge when it is based on usage?



The advantage to having a set price based on averages is that it virtually eliminates nitpicking about bills. We track bills (in a Quickbooks report) to make sure the split is fair and we aren't short too much or over too much on our end, and the tenants appreciate that they don't have to worry about it. And because we always set the payment a bit higher than the actual average (in preparation of potential rate hikes) the tenants almost never have their bills adjusted up and occasionally get the glorious surprise of a utility rebate cheque from us. Everybody wins.

 

[RedlineBrett]

[quote user=Sherilynn]Why shouldn't the tenant using the utility pay the entire delivery charge when it is based on usage?


We choose not to go that far as we still get a water/waste bill even when a property is vacant and the water shut off. The utility provider seems to have a laundry list of (albeit small) charges that show up one month to the next. Sometimes utility providers don't get out to read the meters every month and so they just bill you based on an estimated average, and then reconcile after they get out there to read the meter. tenants don't often figure this out and call in screaming...



But if you are tight enough on your utility reconciliations and good at communicating with tenants I have no doubt you could make it work.