Landlord/Tenant Issues for Water and Sewer Utilities

MRSC frequently receives questions regarding the responsibilities of utilities, particularly water and sewer, where the utility service is provided to a tenant.

Here is an overview of utility billing in the landlord/tenant context per Washington State regulations.  A utility should be aware of these statutes to ensure compliance with state law and to respect the rights of both landlords and tenants.  

Utility Services—Who Is Responsible?

Both the utility and the landlord have responsibilities regarding utility service provided to a tenant, and these responsibilities are set out in RCW 35.21.217 for cities and RCW 57.08.081(7) for water-sewer districts. In summary, these statues note that if the utility account is in the tenant’s name, the utility may, at its option, notify the landlord of a tenant’s delinquency: Further, it must do so when requested by the landlord in writing. Compliance with notification when requested by the landlord is essential to protecting the utility’s full rights of collection.

Under RCW 35.21.217, a city utility must make a good faith and reasonable effort to provide written notice to the service address of pending disconnection of water service for nonpayment at least seven calendar days prior to disconnection in the following instances:

• when a tenant resides at the service address
• when a multi-unit residential premises receives utility service through a single utility account, or
• when a utility account's billing address is not the same as the service address of a residential rental property.

If requested, the city must put the account in the tenant’s name, without making the tenant responsible for the landlord’s delinquency—“except as otherwise allowed by law” and only where the city offers the tenant the opportunity to set up a reasonable payment plan for the delinquent amounts.

Compliance with landlord notification requirements preserves the city’s right to collect from the landlord or the previous tenant any delinquent amounts due for service previously provided to the service address.

A city utility must be sure to read RCW 35.21.217 closely; the above is merely a summary of its main requirements. Landlord tenant requirements for water-sewer districts are set forth in RCW 57.08.081(7), which does not contain many of the provisions in RCW 35.21.217.

Utility Charges—Who Should Pay?

The landlord is ultimately responsible for utility charges even if the utility account is in the tenant’s name. City utility liens for utility service charges are imposed on the property (“against the premises”) to which the utility service is provided (see RCW 35.21.290 for water and electricity and RCW 35.67.200 for sewer).

For this reason we recommend that city utility ordinances identify the landlord as being ultimately responsible for utility charges, regardless of whether an account is in the tenant’s name or not. Of course, the city may also pursue collection of delinquent charges from the tenant if the account is or was in the tenant’s name. RCW 57.08.081 contains corresponding provisions applicable to water-sewer districts.

Terminating Utility Services—Under What Circumstances?

RCW 59.18.300 makes it unlawful for a landlord "to intentionally cause termination of any of his or her tenant's utility services." What happens, though, when a utility account is in the landlord’s name and the landlord requests termination of service? It should be easy, right?

Not necessarily. To complicate this scenario, let’s say that a tenant is still residing at the service address and the landlord has not notified the city of termination of the rental agreement or that the premises have been vacated. In this situation, we recommend the following options:

• Have an ordinance or policy in place that states that the utility will not disconnect utilities at the landlord’s request if there is a known occupant and the account is current.
• If no ordinance exists, have the landlord sign a written request to have the service terminated, one that includes a clause holding the utility harmless for any claims resulting from termination of service. Refer to RCW 59.18.300 if needed.
• Provide written notice to the tenant of the landlord’s request for termination and give the tenant a reasonable period of time, such as seven days, to arrange for continued service.

Denying Utility Services—Or Not 

A utility cannot refuse to provide water service to a new tenant based on a prior tenant's unpaid water bill. That is what the 9th Circuit Court of Appeals held in O'Neal v. Seattle, 66 F.3d 1064 (1995).

Because of the complexities involved in the landlord/tenant context, we recommend that a utility establish written policies that set out clear rules on how to deal with issues identified above.

Further Resources and Training

Here are some webpages from MRSC that deal with municipal collection and billing:

• Utility Billing Procedures—provides guidance on utility billing procedures and include examples
• Collection Practices for Delinquent Utility Accounts—provides an overview of the various collection practices available to utilities for delinquent accounts
• Utility Liens and Shut-Offs Walk-Through Tutorial—Use this online tool to determine whether and under what circumstances your utility has a lien or is authorized to shut off service to enforce payment 

For more in-depth coverage of these issues, please consider registering for our May 2 webinar, Understanding the Complexities of Billing & Collections, from 1—2 PM.  As Part 3 of our 3-part series on Utility Fiscal Management, this webinar will review common billing and collection challenges for utilities, such as under or overpayment, service termination, use of collection agencies, and handling delinquent accounts.

Questions? Comments?

If you have any questions, comments, or suggestions regarding this subject please comment below or contact me at orey@mrsc.org. If you have questions about other local government issues, please use our Ask MRSC form or call us at (206) 625-1300 or (800) 933-6772.