May 20, 2020

Utilities for Rental Property: What Every Tenant Should Know

While tenants should always ensure that they abide by the terms of the lease, unfortunately, this doesn’t always happen. Every tenant needs to understand the responsibilities for the utilities at their rental property.

Utilities for Rental PropertyOne common lease violation that occurs is when tenants attempt to shut off the utilities upon vacating a property. In addition to often being a violation of the lease agreement, turning off the utilities can also lead to potentially serious problems –water damage, freezing pipes, and a dead landscape –just to name a few. Not to mention that when the landlord has to turn the utilities back on, additional extra costs are often incurred. Sometimes, tenants will even vacate a property –while still owing unpaid utility bills, putting the landlord in the frustrating position of being unable to turn the utilities back on until the back payments are made.

For many tenants, though, shutting off the utilities usually isn’t done with bad intentions. Often, shutting them off may seem like a logical step that’s done when leaving the property. The fact is, though, that utilities should almost never be turned off –and tenants should never ask a utility company to do so without the express permission of the landlord.

To help you to abide by your rental agreement, and to ensure that you understand your responsibilities as a tenant, here’s a look at some dos and don’ts when it comes to utilities for a rental property.

Transfer Utilities Don’t Terminate

First, it’s important to understand that the utility connection should never be terminated, canceled, or disconnected by a tenant. While it’s true that in most single-family rentals, tenants are usually responsible for paying their own utilities for the duration of their lease, it’s also true that they are responsible for damage that occurs to the property due to a disconnection of the services.

Tenants disconnect or terminate services for various reasons –this includes going out of town, moving out early, or breaking the lease. No matter what the reason, though, tenants should never disconnect the utilities. There are a number of risks that are involved with having the utilities shut off at the rental, and should damage occur due to the utilities being shut off, you could be held liable for the cost of repairs; the expenses can be taken from your security deposit.

Here are some of the damages that can occur when the utilities have been disconnected:

  • A dead lawn and/or landscaping due to water being shut off
  • Melted ice from the ice maker causing damage to the floors
  • The sump pump would fail to work during a rainstorm
  • A risk of broken pipes in winter due to lack of heat
  • No water for the cleaning crew to do their job

Oftentimes, there will also be a reconnect fee when the landlord has the utilities turned back on. In addition to the damages, this fee can also be taken out of your security deposit.

Protection That Landlords Should Take

While the utilities shouldn’t be disconnected, the unfortunate fact is that it still can happen. Tenants cancel the services instead of transferring them, or unpaid utility bills pile up, resulting in the utility company then shutting them off. For this reason, landlords should proactively take steps to help protect themselves and their property.

Here’s a look at a few things that landlords can do:

Turn on Third Party Notifications

Third party notifications allow the landlord or property manager to be copied in on communications between tenants and the utility company. This will alert them if the utilities are going to be shut down, canceled, suspended, or transferred.

Have the Utilities Revert to Owner

Setting up the utility account to revert back to the landlord helps to eliminate the gap that’s left when tenants leave. It also means there should be no reconnection fees and enables landlords to be in the know at all times.

Outline Requirements in the Lease

Finally, and perhaps most importantly, landlords should always protect themselves with an airtight lease that outlines a tenant’s responsibilities and requirements, as well as the consequences for nonpayment. A violation of the rental agreement that results in damage to the property could result in the landlord being able to apply part or all of the security deposit toward the damages.

Here is a look at some things that should be included in the lease:

  • A list of all utilities that tenants are responsible for
  • The stipulation that tenants are not permitted to have the utilities shut off
  • A requirement for tenants to place the utilities in their name effective the first day of the lease
  • A stipulation that a tenant’s failure to place the utilities in their name is a violation of the lease
  • A proviso that the tenant agrees that a copy of the lease may be provided to a utility company and that the landlord is entitled to receive delinquent billing or cut-off notice from the utility company without the consent of the tenant
  • A stipulation that if for any reason, a tenant has the utilities turned off, the landlord can charge a reconnect fee for each utility, plus any utility company charge
  • A stipulation that failure to pay the utilities is considered to be a violation of the lease
  • A stipulation that, in the event that the utility company does not allow the tenant to place the utilities in their name, and bills the owner or landlord, the landlord will provide a copy of the utility bill to the tenant and the tenant must pay the landlord
  • A stipulation that tenants can and will be evicted for non-payment of utilities
  • A stipulation that, should the tenant leave before the lease is up, resulting in the landlord being required to pay the utility bill, the amount can be taken from the security deposit

In many cases, if there is an outstanding balance on the account, the utility company will not provide services to the next tenant; and in some cases, the landlord, before the balance has been paid. For this reason, any outstanding balances that are owed by the tenant will be pursued.

Note: Just as tenants should avoid turning off the utilities at the rental property, landlords should as well. While some landlords may be tempted to shut off a tenant’s utilities due to a violation of the lease, or in an attempt to force an eviction, in almost every situation, this is against the law, and doing so could result in the tenant taking legal action against the landlord. It’s important for landlords to ensure that they refer to, and abide by the eviction laws in their state.

Utilities for Rental Properties: Best Practices for Tenants

For tenants, it’s in your best interest to be well-informed on the issue of utilities, and aware of your responsibilities, as well as what could be considered to be a violation of the lease. If your landlord doesn’t supply you with information regarding the utilities, here are some general best practices for tenants regarding utilities.

Ask Questions

If you have any questions regarding your rental agreement or concerning your utilities, it’s important that you ask your landlord. Always ask questions about utility services and the billing process, before you sign the lease.

Here are a few good questions to ask:

    • Are the utility accounts in the tenant’s name or the landlord’s?
    • Which utilities does the tenant need to set up?
    • Are there preferred providers for each utility?
    • What is the contact information for each of the utility providers?
    • Are there any outstanding utility charges on any of the account
    • What kind of heating is in the unit?
    • Where are the thermostat, fuse box, and hot water heater located?
    • Who is in control of the temperature settings?
    • When is the heat turned on?
    • Does the landlord charge a fee for any late or unpaid utilities?

Know Your Responsibilities

The term utility refers to a number of different services. Common utilities include electric, gas, water, sewer, and garbage. Other services such as phone, cable, and internet –are additional amenities. In most single-family rentals, tenants are responsible for most of the utilities, but in some cases, landlords will pay for utilities that are required to keep the unit in good condition –such as sewer, water, and garbage.  However, every rental agreement is structured differently, so be sure to find out which utilities you are responsible for.

Set Up Your Utility Accounts Promptly

Upon moving in, be sure to transfer the utilities into your name as soon as possible. In some cases, you may even be able to schedule a utility transfer before you move in. Note that as a tenant, you are only responsible for the utilities that you use during the length of your tenancy.

Pay Your Bills on Time

Paying your utilities promptly and on time is important. It’s also a good idea to keep documentation of the payment and any communication between you and the utility company and/or landlord in reference to your bills. By keeping current with your bill you will reduce your chances of running into problems. Tenants who are behind on utility payments should contact their utility provider to resolve the issue as quickly as possible.

Take Action to Resolve Utility Disputes Quickly

They key to resolving most disputes is documentation. If your utility company has a problem with your payment or lack thereof, having the proper documentation to prove that you did, in fact, make the payment can help to keep you out of trouble. If you have a problem with your bill, take steps to reconcile this quickly so as not to incur any late fees, and to avoid any disruptions with your services.

At the end of the day, utilities are usually the tenant’s responsibility, but ultimately, the rental is the property of the landlord. Because of this, any damage that’s caused by, or expenses that are incurred from shutting off utilities or failing to pay can usually be taken directly from the security deposit.

Tenants –if you have any questions regarding the utilities for your rental property – don’t hesitate to ask your landlord or property manager. Being well-informed on your rights, as well as your responsibilities as a tenant is vital for ensuring that you abide by the terms of your lease, and can help to save you from a tremendous amount of money –and hassle.

Colorado tenants –are you looking for homes to rent in or near Colorado Springs? Have a look at Springs Homes For Rent rental properties today!

Disclaimer: The information provided is for and advisory purposes only. Springs Homes accepts no responsibility for its accuracy. Landlord-tenant law varies considerably from state to state and we recommend that you consult with an attorney familiar with current federal, state, and local laws when creating a rental agreement.


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