As a landlord, it is critical to decide if you’re going to handle billing or if you’re going to have the tenants put their name on the utility bills. On the one hand, utilities can be included as part of the rental price.
Alternatively, if you prefer RUBS, then you can ensure tenants pay for what they use. Either way, there are certain responsibilities that fall on the landlord as well as the tenants.
Is the Landlord Responsible for Utility Bills?
When you decide on how utilities are to be paid, it needs to be crystal clear in the lease agreement. As an example, in most cases, water and sewage all fall under the water bill. If your water billing is different, then you’d need to make sure it’s spelled out, so there’s no question as to who is responsible.
Assuming the lease states the tenant is responsible for all the utilities at the rental property, then the water bills are typically included. On the other hand, if the water bill is part of the monthly rental fee, then the landlord is responsible.
What if a Tenant Leaves a Water Bill Unpaid?
Because utilities are generally sub metered under the landlord, unpaid water bills can become a gray area as to who is responsible for making sure they get paid.
According to Texas law, tenants can’t be cut off from their utilities even if they don’t pay their bills. If a landlord were to interrupt utilities due to non-payment, it is against the law. Should the landlord suspend utility services, tenants can recover possession of the rental unit, end the lease, recover damages, and attorney fees from the landlord.
What About Utility Bills in an All Bills Paid Unit?
In an “all bills paid” rental unit, if the landlord fails to pay the utility company, then there are certain things a tenant can do to get out from under the issue. A tenant would be entirely within their rights to terminate the lease in addition to expecting the final rental payment to deducted from the security deposit.
Other scenarios also include a tenant being able to recover moving costs, utility connection fees, and a variety of additional charges like court costs or attorney fees. It’s something to remember when it comes to making sure the bills get paid.
Lawful Expectations on Utilities
Tenants have the right to a safe and habitable unit, meaning every unit must have proper heating in addition to having everything in the building up to code. If the plumbing, electricity, or heat aren’t working and the landlord doesn’t conduct repairs, tenants can terminate the lease without repercussions from the landlord.
Landlords also cannot pass on fees like deposits, disconnection, and other expenses to their tenants. Tenants are only responsible for water and wastewater in addition to charges that are related to those specific services in individual units. They cannot be charged for common areas like pools or laundry rooms.
If a tenant finds a landlord to be in violation of public utility commission rules, then the tenant can report them to the Public Utility Commission of Texas, Water Utilities Division, 1701 N. Congress Avenue, P.O. Box 13326 Austin, Texas 78711-3326.
We here at Southwest Utility Solutions can answer any questions you might have regarding billing solutions for your multifamily property. Contact us – we’re happy to help!