A Seattle landlord made the news this week because her new tenant has no electricity. The utility company refused to transfer the power because the previous tenant has a delinquent bill at that address.
The report says that the outstanding balance is $1,900.
Now, the new tenant is sweltering in the heat, while some are questioning whether the landlord had the right to re-rent the property if electricity was not available.
The parties are negotiating, but at some point the landlord may have no option but to pay the delinquency, then track down the tenant for the utility company.
Unfortunately, this is not an uncommon scenario. Many utilities around the country have been given the right to go after the landlord — not the delinquent tenant — even if the account was in the tenant’s name. In most cases, the utility can place a lien on the rental property, without having to incur the cost of pursuing the tenant.
If you don’t want this to happen to your rental property, consider your options:
1. With some properties, it may make sense to supervise the utilities. Calculate the risk of allowing a tenant to place utilities in their name versus keeping the utility accounts in the landlord’s name and charging a higher rent. Weigh the risk of spikes in usage over the risk of delinquent bills.
An additional benefit of monitoring utilities: sudden spikes in usage could signal major repair problems, or in the worst case scenario, criminal activity like grow ops or other tenant fraud.
2. In areas where landlords are liable for a tenant’s utility bill, demand that the utility notify you as soon as an account is delinquent.
3. Make it clear in the lease who is responsible for utilities, and ask your attorney to beef up the language so you have the right to indemnification, and grounds to evict the tenant who is falling behind on their bill.
4. Check the account before the lease ends or the tenant is scheduled to move out — while you still know where the tenant lives.
5. Demand to know the tenant’s forwarding address.
6. Don’t let a tenant get away with this! Make it a policy to pursue delinquent tenants so their credit reports reflects their bad decision-making.
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.