Landlord Stuck With Tenant’s Unpaid Utility Bill

Q: Is there any recourse for landlords not to get stuck with utility bills. – TVS Landlord

It’s been a few times that tenants move in a property, residential or commercial, sign up with the utility companies and then a few months before they leave they call the utility (like Hydro or Enbridge Gas) tell them that they are no longer responsible for the utilities and later on I find out that as the landlord I’m stuck to pay their outstanding bills.

When I contact the utility companies they say as the landlord I have to pay it and then bring the tenant to court to collect (in other words I just became a collection agency for these companies).

I live in Ontario, so unfortunately here there is no way to have a deposit from the tenants.

As far as residential rentals go, a landlord can agree to provide utilities and apply a portion of the rent payment, or the tenant signs up for an account directly with the utility and pays the fees to them. In that case, the tenant has some incentive to pay because it could hurt their ongoing relationship with the utility.

For example, Enbridge allows tenants to make payments directly to their own account, which they then transfer to their next property when they move. An Enbridge spokesperson told us that if a landlord contacts them, the landlord’s name can be noted on the account as the property owner, and an Enbridge employee will call the landlord if the tenant asks to transfer the utility out of his or her name. That may not avoid liability as the property owner, but it would give the landlord some advance notice that the tenant is trying to transfer the account before it’s time for them to move.

We would love to hear from other Ontario landlords regarding whether they’ve had similar experiences.

Without a deposit, you likely will have to take legal action to collect outstanding expenses from your tenant. Ontario’s new metering¬†law¬†takes effect soon. These rules may impact a landlord’s rights and responsibilities regarding utilities. One change that is likely: a landlord with meters (where tenants pay direct) may not have the ability to apply to the Board for the outstanding utilities as “unpaid rent”.

We recommend that you contact Ontario legal expert April Stewart with Landlord Legal (705-812-2267) to find out your best course of action.

The tenancy agreement should include a provision that states who is responsible for each of the utilities. You can accomplish this via a checklist marked “landlord” or “tenant” for each item, or you can simply state “tenant shall be liable for…” and indicate the responsibilities, then do the same for the landlord.

In addition to the lease provisions, be sure to keep records of all communications with the tenant and with the utility companies regarding the expenses, and all bills and records of payments, because it will be the landlord’s burden to prove the expenses in court or before the Board.

Keep in mind that landlords do have power to make their tenants pay rent on time. Tenant Verification Service, a credit reporting agency, offers landlords the ability to Report Tenant Pay Habits. Good tenants reap the rewards of a solid rental payment history, while bad tenants will think twice before becoming habitually late payers. See Report Tenant Pay Habits for more information.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

{ 8 comments… read them below or add one }

Andrew M. December 7, 2010 at 11:56 pm

In our situation, the tenants pay for gas and hydro. But we are registered with both as the landlords. If the tenant cancels their service, we are automatically notified. There is a fee to transfer it back to us, but that’s better than not knowing about it, plus it gives you a heads up that the tenant may be moving early.

This past year we got a call that the gas was in default and had been shut off – it wasn’t paid for 3 months. We immediately contacted the tenants and made them aware of their options including help from some local charities. After they arranged their payback schedule with the gas company, all was well.

It’s a good thing to let the tenants pay for their services, but as landlord, make sure you also have some agreement with the services companies so they can call you if there are problems with the accounts.

G. Hall March 18, 2012 at 8:27 am

I have a written lease agreement that the tenants pays for a stated portion of the utilites, they refuse to pay. The Ontario Residency Act indicates that utilities are not rent and cannot be used for a basis for eviction. Does anyone have any ideas on what recourse I have to collect my money?

Chris March 19, 2012 at 7:19 am

Talk to April Stewart at http://www.landlordlegal.ca — she’ll know what to do –

Joseph May 14, 2013 at 12:04 pm

My tenant paid first and last. She gave written notice that she leaving at end of month. However, she moved out in middle(15th) of the month and called hydro to cancel the service. Hydro billed me for the rest of that last month which I paid. Isn’t the last 14 days of the hydro bill hers? It cleary states in the rental agreement that she is responsible for Hydro while as a tenant. Since she paid for the whole last month, it’s still her apartment…isn’t it? Am I wrong?

mary-michael jackson May 16, 2014 at 7:45 am

Can the city hold the landlord responsible for 2 unpaid utility bills left by 2 previous tenants, and each time the bill were in the tenants name. Help please

mary-michael jackson May 16, 2014 at 7:48 am

The city is also refusing to turn the water on until both bills are paid.

Kat May 17, 2014 at 1:47 am

@Joseph: if she moved early, the hydro would’ve been a very nominal amount, if anything at all, since nobody was there. Unless she left everything on. Did you later make a verbal agreement with her about leaving the residence early? If so, you are technically responsible for it, or it becomes a her word against yours in small claims, so likely not worth it.

Lynne July 15, 2014 at 11:54 am

I gave legal notice to my landlord that I was terminating my tenancy on or before July 31. The unit is electric heated and all appliances are electric and the hydro account is in my name. Similarly, the gas bill is in my name. Since the only appliance that uses gas is a fireplace, I notified the gas company to end my account as of May 31. The gas company advised that Landlord and he refused to take responsibility on the account until July 31. The gas fireplace was turned off and there was no consumption of gas. The gas company is billing me service charges and delivery charges to the property.

Can the landlord simply instruct the gas company to bill me for the service to the property (it is multi unit property) without my authorization after I have cancelled my account ?

Isn’t the Landlord responsible to the service of the property ?

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