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What Is Fair For Tenant Who Pays Hydro For Entire Duplex?

ClintL

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I have a duplex in Hamilton where there are two separate meters for hydro and one for gas. The basement was recently combined with the first floor as a new apartment to comply with zoning and the basement tenant actually took over the entire combined unit. He is now paying market rent plus the hydro since one meter covers both the basement and the first floor.



He recently questioned why he should be responsible for the HVAC and hot water. At present, I am paying for gas and the water/sewer for the entire duplex. The upstairs tenant (whom I inherited) pays below market rent and no utilities - I pay his hydro too. After the upstairs tenant moves, of course I will charge the next tenant market rent plus hydro.



Back to the downstairs tenant and the HVAC/hot water. I'm not sure how to address this issue. I heard so far that hydro to the HVAC for heat is not that much - only used for operating the fan. Gas supplies the heat and hot water then.



When summertime comes, the AC will be a different story since it's central for the entire duplex.



What would be the best way to address this issue and make things fair for everyone? I'm thinking of giving a credit for AC back to the downstairs tenant in some way during the summer months but don't know how much.
 

housingrental

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Keep paying gas and water

Examine cost for separate heating system and meter and take action from there if economic

Do the same for heating and cooling electric use

AS IS - You should be paying for hydro on unit that AC is hooked up to OR should be negotiating this at start of lease (ie for X months landlord will reimburse tenant XX% of electricty usage due to AC)
 

invst4profit

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I would explain the costs as you have indicated in your post and offer the tenant a $10 rebate per month. I would not try to separate the cost of AC in the summer. The $10 is really a arbitrary number you chose intended to appease the tenant not necessarily intended to correct the inequality. Do not reduce his rent as this will effect your annual rent increases.



The reality is he has signed a lease and should have indicated his concerns prior to signing. It is your decision.
 

JoshOttawa

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I have a similar situation in a triplex where each unit has separate hydro meters and they are renting + hydro, but the main floor unit hydro costs include the A/C in the summer and furnace fan and eavestrough heating cables in the winter. I previously lived in the unit so I had a year and a half of hydro bills which was handy. I took an average hydro usage of the months during which the heating system (including heating cables) and cooling system would be functioning very little (Sept/October and April/May) to give me a baseline, and then compared that to the average usage for the whole year. It worked out that approximately 1/3 of the bill is due to the heating and cooling, and therefore in my lease I agree to refund the tenant 1/3 of the hydro costs. They send me a copy of their bill every two months and I write them a cheque for 1/3 of the hydro at the end of the year. Obviously this situation isn't optimal but this way, the tenant still has an incentive to conserve and I don't have to deal with the hydro company.



Josh
 

invst4profit

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Hopefully you are not refunding him 1/3 of his delivery cost as well.



Have you looked into the cost of having a 4th meter installed to serve only the furnace and AC. If you did you could have it in your name and bill each tenant 1/3 of that cost.
 

ClintL

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Has anyone ever done this before, i.e., install a separate meter just for the HVAC? If so, what is the approximate cost of doing this?



Clint
 

JoshOttawa

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Greg - I am only refund a 1/3 of the usage - good catch. I just plug all the numbers from the copies of the bills into a spreadsheet and it gives me a total excluding delivery, hotwater rental, late payment charges, etc at the end of the year and I refund 1/3 of that.



I've done some googling and foruming of the separate meter option in the past and general concensus seems to be about $5K for a new meter, plus whatever rewiring you need to do inside the house (shouldn't be that bad if it is just the furnace/ A/C) but I would have to re-run a couple lines to get to outdoor plugs that the heating cables go into.



For me, it's not worth it at this point from a capital cost side as well as an admin side of getting the bill, splitting it up and collecting from 3 different tenants. Perhaps down the road if I am doing other renovations or electrical work anyway.



ClintL - hope this helps. You may be able to negotiate a compromise with the tenants in the short term (if they complain that they are paying for the other tenant's A/C) such as a flat rate refund or percentage and when you get new tenants in, you can dictate the terms in the lease, or look at the new meter option if it makes sense financially. Let us know what you decide and how it turns out.



Josh
 

Tootse

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You could ask them what would make them happy? Maybe you'll get an unsatisfactory response, but on the other hand you may hear a reasonabe solution.



Tootse
 

invst4profit

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Tenants may provide their opinions however it is not wise of a landlord to ask a tenants opinion. Once you ask they believe they are providing what you should do and then they expect you to provide what they want. Do not ask, do not include them in the decision making process but it doesn't hurt to listen to what they may have to say. Tenants never have reasonable expectations and once you ask their opinion they then expect.
 

Tootse

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To the OP, proceed cautiously, because the risks Greg outlines here are definitely something to consider.



Tootse
 

Angela123

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http://quebec.localmartca.com/apartments-condos/Absolutely right! You have the contract that is notorized. So you tenant should follow the rules. What does it mean he wouldn`t pay of he is not agree with something. There are indicated rules, don`t reduce his rent, it will affect your income. Moreover, follow invst4profit advice. `Offer the tenant a $10 rebate per month. I would not try to separate the cost of AC in the summer. The $10 is really a arbitrary number you chose intended to appease the tenant not necessarily intended to correct the inequality.`
 
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