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Question about Water Usage by Tenant

Matthew2145

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Apr 30, 2015
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Hey guys I just had a quick question,

At what point would you be concerned about a higher then average water bill at a rental property?

Typically the monthly water bill has been around the $140 mark per month, however this month it is up to $221 dollars for the month. The property is located in Grande Prairie.

Since this is my first property I am not certain if that is something to be concerned about? IS $80 alot of extra water and I should perhaps be proactive and look for a potential leak? Or is it reasonable to assume that the extra amount could easily just be that its a hot summer so people are taking longer showers or watering the lawn more?

I am probably being overly cautious but I recall reading somewhere that when you see an unusally large spike in water usage then it could be an indicator of an issue that needs to be addressed.
I just have no idea what would be considered a "large spike" in water?

Any advice for this newbie would be appreciated.
 

Matt Crowley

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Always start with a conversation with your tenant. Don't send the letters or form warnings. Making this business work is all about long-term trusting relationships with your customers. You are running a 24-hour a day service for your tenants with nearly zero supervision. Treat them with heaps of respect. That being said both parties have responsibilities that they have pre-agreed to.

If your lease says "utilities included" without any special wording for excessive usage, you are going to just get hung with this additional cost, legally speaking. However, most tenants just want a relationship to get along with you and generally want to be reasonable. Approaching this conversation from the perspective of trying to understand why water usage may have been high and then working together to ensure that the bill is lower in the future is probably the best course of action here. Of course, you can use a bit of the stick and ask for a reimbursement for the "over-usage"...but you really need to tread carefully here. You probably don't have a legal right to demand it. Kudos on you for actually reading your utility bills and being proactive here.

In future, consider renting the suite without utilities and adding a "utilities addendum" whereby you can adjust the rate charged for utilities based on actual usage. This is a tip from user "kfort". I'm not sure how this addendum will work before the RTDRS, but it serves as an effective tool to communicate to the tenant that they are responsible for any overconsumption of utilities.

I'm not trying to maintain a 20% profit on utilities or anything like that by having this utilities addendum, please note. I adopted this form to prevent abuse. If I lose $150 / year on utilities but I have a happy tenant, that is a huge win for me. If I lose $300 on utilities but was able to resign the lease with zero vacancy...I probably also came out ahead.

But to your concern of whether this is a big spike in water consumption, yes it is. Have the in-person conversation and ask if they have noticed any running faucets or toilets. It is probably something like that.
 

Thomas Beyer

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..Or is it reasonable to assume that the extra amount could easily just be that its a hot summer so people are taking longer showers or watering the lawn more?
..
yes.

The water companies are also not always measuring the same day every other month, and use an estimate. Only after a year or 2 do you know what is "normal" and what is "abnormal".
 

LAndersen

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Large uses like that in summer are not uncommon, especially if they have an outdoor pool or garden to water. Keep an eye on it and check for leaks.
 

SVS

Realtor/Investor K-W-C and surrounding area
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It could be due to adjustments. The duplex I live in now I purchased in January, I have had 110$ one month and then -5$ the next. Only caution I would have is double check there hydro to, I caught my dads tenants with pot plants and then right after we started getting really high water bills since usage is usually back dated in this case it was 2 months behind.
 

Sherilynn

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I'm not sure how this addendum will work before the RTDRS,

The utilities addendum has worked fine for me. When calculating daily rental rate on the RTDRS form, include the utilities amount. We have had no issue in collecting.

Our addendum states: "payment shall be reviewed and adjusted as required or at the end of the tenancy." We average our previous year's bills and round up to account for price or usage increases. We review the numbers periodically and when renewing leases we ensure the numbers are on track. When terminating leases, we can either refund the excess or use the over-payment to cover damages or unpaid rent. (In Alberta, a landlord is not supposed to profit from utility payments.)
 

Matt Crowley

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We review the numbers periodically and when renewing leases we ensure the numbers are on track. When terminating leases, we can either refund the excess or use the over-payment to cover damages or unpaid rent. (In Alberta, a landlord is not supposed to profit from utility payments.)

Thanks Sherlynn. Interesting that the RTDRS has upheld that one.

My caution to the above is that if you run into a tenant who wants to make problems for you in regards to whether the "numbers are on track", they can. For example, a tenant can ask if you have a professional utility consumption survey on your suited home whereby you actually know the % utilities upstairs vs. % downstairs. With a lawyer, this is not a difficult argument to make. I've been at the RTDRS when a lawyer has made this argument and the judge was convinced. For a SFH, it is usually not practical to bring in engineers and spend a thousand dollars to have this split up. You can get stuck with the bill in this way because there is one metre per house and no practical way to % split the cost.

Ideally, I would like for utilities for the home to be in my tenant's name but sometimes it just isn't practical.
 

neill

Airdrie, AB
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Any time that you can make utilities a tenant pay item, it will typically work to your advantage. Even our suited props are paid by tenants on a pre-determined split.
 

Matt Crowley

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^ Yes, I use fixed-rate addendum for all my suited properties as well. Just remember, unless you are an engineer you don't really have much basis for the allocations of the "pre-determined" split. It can be challenged very effectively.
 

neill

Airdrie, AB
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^ Yes, I use fixed-rate addendum for all my suited properties as well. Just remember, unless you are an engineer you don't really have much basis for the allocations of the "pre-determined" split. It can be challenged very effectively.

The pre-determination is a ratio pre-set out in advance at time of signing. Upstairs tenants pay 60%, and down 40% of gas and electricity - we advise tenants that this is the ratio, as the upstairs tenant has control of the thermostat. Nothing scientific in allocation, just a split that is contractually agreed to by all parties. Have you seen examples of tenants challenging splits post signing?
 
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