If I Rent My Home, Do I Need to Have Utilities in My Name?
If you are considering renting out your home, it is not necessary that you keep utilities in your name. Utility arrangements are typically negotiated between the tenant and landlord, and reflected in the lease agreement.
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Renting Your Home
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Renting your home is a good way to generate cash and reduce your total housing expenses. If you choose to rent out your entire home to tenants, you will want to keep the utilities in your name while preparing the home for rental. Once the home is ready for occupancy and the tenant takes possession of the property, you can remove your name as the person responsible for utility service to the property.
Boarding Homes
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If you are using your home as a boarding home with one or more tenants per room, it will be easier to keep utilities in your name. Assuming it is a single-family home, which typically has only one meter per utility service, there is no way to adequately bill tenants for their usage. You can compensate for providing utilities in the amount charged for rent, or you can agree to split the utility costs by the number of persons occupying the property.
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Multi-unit Homes
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If your home is a duplex, triplex or fourplex, it is considered residential property. These homes may or may not have separate meters for each utility service. You can choose whether to get separate utility meters when converting this type of property into rental units. If the meters are already separated, you will have the opportunity to have the tenant pay for the utilities. If some or all of the meters are not separated, you will need to pay for utility service.
Example of Multi-unit Property
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Example: Mr. Smith owns a fourplex home in which he wants to rent. All of the units have separate meters for electric and gas service. However, the units do not have separate meters for water service. Mr. Smith states in his rental agreement that the tenants will pay for their use of electricity and gas but he will pay for water service.
Why Some LandLords Pay for Utilities
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According to Teresa Murphy, a 15-year property manager in Kansas City, Missouri, some property owners choose to provide utilities for their properties in Kansas City as an incentive for tenants to move into the property, and to justify higher rents charged for government-subsidized rental payments. Other landlords pay for utilities in order to prevent damage, such as freezing pipes during winter, that might ensue if tenants should fail to maintain utility service.
Why Some Landlords Do Not Pay for Utilities
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Teresa Murphy advises her property owners not to provide utilities for tenants. Her experience has shown, she says, that tenants who are not accountable for utilities typically have higher utility bills than those who must pay their own. Other landlords find that because of the variability of utility costs, they have difficulty controlling their expense and profit when providing utility services for tenants.
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