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Who Should Receive the Utility Bill, Landlords or Tenants?


January 19, 2016 by Toni Nelson
Category: Utilities - Billing and Collection

Who Should Receive the Utility Bill, Landlords or Tenants?

Questions surrounding utility billing are some of the most common inquiries submitted to MRSC. Cities, towns, and utility districts alike are challenged with implementing effective policies for handling utility accounts for rental properties. Landlord/tenant issues regarding delinquency, billing, property vacancy, and termination of service can easily spill over into the hands of jurisdictional staff. Therefore, we highly recommend establishing clear policies for rental properties that can help clarify and mitigate the issues surrounding landlord/tenant disputes.

A particular issue that local governments should address in their policies is whose name – the landlord’s or the tenant’s – the account can or must be in. The liens that municipal utilities have for delinquent utility charges are against the property to which the utility service is furnished, so the landlord, as owner of the property, is ultimately responsible for delinquent utility charges incurred by a tenant. As the ultimately responsible party, landlords don’t want to be surprised by a delinquency incurred by a tenant. Tenants, on the other hand, don’t want utility service to be shut off to their rental because of the failure of the landlord to pay the bill. RCW 35.21.217 addresses these issues to some extent for city and town utilities. For more information, see Utility Billing and Termination in the Landlord/Tenant Context.

Recently, MRSC sent out a short survey to see how various local governments currently address this issue in their policies. We received information back from 154 jurisdictions, including 132 cities and towns and 22 utility districts.

Of the 154 respondents, 34% said that they restrict utility service to the property owner’s name, although this rate was higher for utility districts with 15 out of 22 restricting service to the property owner’s name. Another 60% allow for the bill to be placed in the tenant’s name but only with the landlord’s permission. It should be noted though that many of these jurisdictions stated that they were in the process of updating their policies to require bills to be in the property owner’s name. The remaining 6% of respondents stated that they did not have a policy on this issue.

Many individuals from the 154 jurisdictions that responded voluntarily provided additional billing information including some policy examples. This provided further insight into utility billing procedures used by many of the jurisdictions. Below are some of the more noteworthy findings from the policies provided:   

  • Over half of the jurisdictions that required bills to be in the property owner’s name allow for duplicate bills to be sent to the tenants. These jurisdictions charged between $1 and $5 dollars to send duplicate bills.
  • Many jurisdictions only allow for utility service to be in the tenant’s name once an owner/tenant agreement form is filled out and signed by both tenant and owner.
  • Jurisdiction’s allowing utility service to be placed in a tenant’s name often have a process for encouraging timely payment. Some jurisdictions send past due notices to the property owner once an account becomes delinquent. Others transfer the utility service to the property owner once the tenant becomes delinquent.

It’s important to note that these additional measures disclosed as part of the survey results are in addition to common collection practices used, such as use of payment plans, utility shut-off, liens, collection agencies, and the courts.

MRSC would like to thank all of the jurisdictions that participated in the utility billing survey. If you’re interested in learning more about utility billing, please join us on February 17th for our webinar, Utility Billing and Collection: Understanding the Complexities. This webinar will be a panel discussion and will have experts on hand to answer a variety of questions related to utility billing and collections. You can also browse our utility billing procedures webpage which provides guidance and examples of various aspects of utility billing.

How does your jurisdiction handle utility billing? Share some of your policies and procedures in the comments below or contact me directly at tnelson@mrsc.org

About Toni Nelson

Toni has over 24 years of experience with Local Government finance and budgeting. Toni's area of expertise include "Cash Basis" accounting and reporting, budgeting, audit prep and the financial issues impacting small local government.

VIEW ALL POSTS BY Toni Nelson

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