Utilities - Shared or Fixed monthly charges?

[cozzafrenzy]

If you have a suited bungalow, please let me know how you deal with the utility bills for the tenants.
Does one tenant have the home utilities in their name and the other tenant pay them?
Do you put the utilities in your own name or business and have both tenants pay a ratio (ie: 55% up, 45% down).
Do you keep the utilities all in your name, go on a budget plan such as Easymax and build the costs into the rent?

 

[JimWhitelaw]

Main floor tenants have utilities in their name. We use the utility sharing agreement available in the downloads section to have the lower tenants pay their share - lack of payment is a breach of their lease agreement, subject to the same penalties. Never had a problem with this - but we screen carefully for compatibility between tenants in a shared house.

 

[Cannice]

I actually tell the upstairs tenants I will give them A DISCOUNT OF THE rent and they put the utilites in their name
it works well
actually | still get what |I would expect to get for rent but the tenants think they are getting a discount and I lower the rent 100 in the winter
to help offset costs
my trick is I advertise higher and then offer the dicount
i dont like trying to get more money out of tenants
I only get sob stories so this way they think they are winning

 

[cozzafrenzy]

QUOTE (JimWhitelaw @ Jun 3 2010, 10:39 AM) ... we screen carefully for compatibility between tenants in a shared house.

How do you go about doing this?

 

[Sherilynn]

We keep the utilities in our name. Tenants sign a "utilities agreement" and pay a fixed rate ("subject to adjustment") with their rent, so utilities are paid in advance. Both the utilities agreement and the lease state that non-payment of utilities constitutes breach of lease and is grounds for eviction (etc.).

We decide on the amount based on rounding up the average of last year`s bills. My utilities agreement does not specify the 60/40 split because that is one of the items that is subject to adjustment. For example, one of our properties has a heated garage that only one suite rents. The bills were huge and I discovered he had the garage heated to 15 degrees. I explained that I would need to adjust the split and he accepted it.

Pros to this method: bills paid in advance, tenants sometimes get a rebate which makes them happy, tenants don`t have to worry about hookups, less disputes between tenants regarding utilities

Cons: slightly more paperwork and utility tracking on my end

Regards,
Sherilynn

 

[JimWhitelaw]

QUOTE (cozzafrenzy @ Jun 3 2010, 11:29 AM) How do you go about doing this?
By interviewing them. Ask if they`ve shared a house before, ask about pets, work, schedules, cars, etc. Then we try to match up people that we think will get along well. It`s part of the education process for new tenants - letting them know what is expected from them beyond prompt payment of rent - that sharing a house is a bit like an apartment, you share some walls and need to be considerate of others, but that you get extra space and a yard, etc.

It`s a bit more work up front to help ensure that you`re not dealing with irrational tenants that can`t get along down the line.

 

[invst4profit]

In Ontario the safest approach is to insist one of the tenants put the utilities in there name and provide proof of such prior to handing over the keys.
It is very difficult to collect for none payment of utilities from an X tenant ( all most impossible as is eviction for none payment) and is best left as the responsibility of the utility company rather than the LL.

 

[DaveRhydderch]

QUOTE (Sherilynn @ Jun 3 2010, 11:57 AM) We keep the utilities in our name. Tenants sign a "utilities agreement" and pay a fixed rate ("subject to adjustment") with their rent, so utilities are paid in advance. Both the utilities agreement and the lease state that non-payment of utilities constitutes breach of lease and is grounds for eviction (etc.).

We decide on the amount based on rounding up the average of last year`s bills. My utilities agreement does not specify the 60/40 split because that is one of the items that is subject to adjustment. For example, one of our properties has a heated garage that only one suite rents. The bills were huge and I discovered he had the garage heated to 15 degrees. I explained that I would need to adjust the split and he accepted it.

Pros to this method: bills paid in advance, tenants sometimes get a rebate which makes them happy, tenants don`t have to worry about hookups, less disputes between tenants regarding utilities

Cons: slightly more paperwork and utility tracking on my end

Regards,
Sherilynn

+1 on this method.

 

[Sherilynn]

Sorry, I do not speak text so I do not understand the +1.

Regards,
Sherilynn

 

[DaveRhydderch]

QUOTE (Sherilynn @ Jun 7 2010, 08:48 AM) Sorry, I do not speak text so I do not understand the +1.

Regards,
Sherilynn


Lol. Sorry. I was just saying thats what I do.

 

[DaveRhydderch]

QUOTE (JimWhitelaw @ Jun 3 2010, 10:39 AM) Main floor tenants have utilities in their name. We use the utility sharing agreement available in the downloads section to have the lower tenants pay their share - lack of payment is a breach of their lease agreement, subject to the same penalties. Never had a problem with this - but we screen carefully for compatibility between tenants in a shared house.


Obviously Jim if this method works for you great. My concern is that a tenant upstairs stops paying the utilities, continues to collect from the downstairs tenant, and then disappears when the heat is turned off. Obviously you have a certain degree of protection with the damage deposit and I don`t think you`re liable for their utilities, but it could be a big inconvience.

 

[Sherilynn]

A caveat for anyone who leaves all utilities in the upper suite tenant`s name...

I just spoke with a possible RTO client and utility issues is one of the reasons that she is ready to stop renting. The utilities are in her name; the lower suite tenants speak very little English and rarely answer their door; and last month`s Epcor bill was over $900! (Perhaps they have a grow-op, but they won`t let anyone in so who knows.) Because the lower suite tenants are uncooperative, this mess would fall into the landlord`s lap, plus he`ll be losing a tenant because of it.

Regards,
Sherilynn

 

[MarkKruse]

QUOTE (Sherilynn @ Jun 3 2010, 11:57 AM) We keep the utilities in our name. Tenants sign a "utilities agreement" and pay a fixed rate ("subject to adjustment") with their rent, so utilities are paid in advance. Both the utilities agreement and the lease state that non-payment of utilities constitutes breach of lease and is grounds for eviction (etc.).

We decide on the amount based on rounding up the average of last year`s bills. My utilities agreement does not specify the 60/40 split because that is one of the items that is subject to adjustment. For example, one of our properties has a heated garage that only one suite rents. The bills were huge and I discovered he had the garage heated to 15 degrees. I explained that I would need to adjust the split and he accepted it.

Pros to this method: bills paid in advance, tenants sometimes get a rebate which makes them happy, tenants don`t have to worry about hookups, less disputes between tenants regarding utilities

Cons: slightly more paperwork and utility tracking on my end

Regards,
Sherilynn
Ditto for us on this method.
An extra pro: we know absolutely that the utilities are paid and up-to-date.
We also have the tenants write a separate check for utilities along with their rent check. i.e. the utilities check is received at the BEGINNING of the month. And it keeps the audit trail clear for payments.
One other thing we do is to set the monthly utility charge slightly higher than the 12-month average. Then when we settle at the six-month marks (Dec and June), the tenants are very likely to get a refund. (we don`t want to try and collect after...)