Utility Bills = Landlord or Tenant Responsibility?

[gkisystems]

I'm a landlord in Wisconsin. As any landlord knows, you get a bad apple once in a while. What should happen under this scenario and/or how can I best deal with it?

Tenant falls behind on their bills and cannot pay the electric/gas anymore, so they call the power company and inform the power company that they are leaving the property and to take the bill out of their name. The power company complies by taking the bill out of the Tenant's name and puts it into the Landlord's name (me), but the tenant does not move out of the property. I, as the landlord, call the power company to inform them that the tenant has not moved out and the bill should not be in my name, but rather still in the tenant's name. The power company's policy is that they cannot put service into the tenant's name unless the tenant personally calls and puts it into their name - but the tenant will not do this for obvious reasons, and even if they tried, the power company won't give them new service with large unpaid balances due. Additionally, the power company cannot by law turn off the utilities during the winter months, so the Tenant continues to consume gas/electric at $300-400/month which for comparison purposes, rent and the security deposit are only $550/month. Given the financial hardship of the tenant, they can't pay rent either, so I go through the evictions process and get them out, but it takes 4-8 weeks and by the time they are out, the unpaid rent and other damages well exceeds their security deposit.

What should happen with the $400 utility bill that was wrongly put in the landlord's name for service to the tenant? I can sue in small claims and be awarded a judgement for the amount the power company billed me for the tenant's service, but I'm highly unlikely to collect. While it is my job to deal with tenant issues, eviction issues, and deal with the collection for any money owed by the tenant to me, I don't think it's my job to act as the collection agency for the utility company. Essentially, the utility company is selling services and making a profit off the landlord illegally (tenant committed identity theft essentially by saying they are no longer using the utilities, but continued to use those services).

How can I effectively push back on the utility company so I"m not stuck with the tenant's bill? The only option they gave me was to have the utilities shut off when the tenant calls to take it out of their name - BUT if I do that, the pipes can freeze and my house can be damaged. Any advice is appreciated.

 

[CSO286]

I'm a landlord in Wisconsin. As any landlord knows, you get a bad apple once in a while. What should happen under this scenario and/or how can I best deal with it?

Tenant falls behind on their bills and cannot pay the electric/gas anymore, so they call the power company and inform the power company that they are leaving the property and to take the bill out of their name. The power company complies by taking the bill out of the Tenant's name and puts it into the Landlord's name (me), but the tenant does not move out of the property. I, as the landlord, call the power company to inform them that the tenant has not moved out and the bill should not be in my name, but rather still in the tenant's name. The power company's policy is that they cannot put service into the tenant's name unless the tenant personally calls and puts it into their name - but the tenant will not do this for obvious reasons, and even if they tried, the power company won't give them new service with large unpaid balances due. Additionally, the power company cannot by law turn off the utilities during the winter months, so the Tenant continues to consume gas/electric at $300-400/month which for comparison purposes, rent and the security deposit are only $550/month. Given the financial hardship of the tenant, they can't pay rent either, so I go through the evictions process and get them out, but it takes 4-8 weeks and by the time they are out, the unpaid rent and other damages well exceeds their security deposit.

What should happen with the $400 utility bill that was wrongly put in the landlord's name for service to the tenant? I can sue in small claims and be awarded a judgement for the amount the power company billed me for the tenant's service, but I'm highly unlikely to collect. While it is my job to deal with tenant issues, eviction issues, and deal with the collection for any money owed by the tenant to me, I don't think it's my job to act as the collection agency for the utility company. Essentially, the utility company is selling services and making a profit off the landlord illegally (tenant committed identity theft essentially by saying they are no longer using the utilities, but continued to use those services).

How can I effectively push back on the utility company so I"m not stuck with the tenant's bill? The only option they gave me was to have the utilities shut off when the tenant calls to take it out of their name - BUT if I do that, the pipes can freeze and my house can be damaged. Any advice is appreciated.

I'm form another northern state with Cold Weather rules, so I did a little digging. The utility company CAN turn off power during the cold season, but there is a procedure they must follow. The cannot turn off power during the winter months if the customer has entered into and remains compliant with a payment plan. It sounds as if even if your tenant had entered into a a payment agreement, they probably are no longer in compliance with the payment plan and would be subject to shut off.

(Hence, reason one they called to pull the utility from their name.)

Now, you are the one stuck with that bill. Your recourse as the landlord? Evict, then sue for any unpaid rent and the utility costs you've been stuck with. Since you are the landlord, you cannot simply turn off the power because you a) want to protect your investment; and b) it's illegal for you to do so--constructive eviction, I think is the term.

(Reason 2 that they called to put the utility in your name.)

To answer the question: The utility company has no responsibility in this situation. You can't make them pay. You need power to the home to prevent the pies from freezing and other cold weather damages, and they can't violate their policy on you say-so. (Seriously, what would stop any third party from calling the utility and saying the person responsible for the bill at 123 Brown street is Bill Gates, so please send hime the monthly bill? See my point?)

 

[CSO286]

The joys of being a landlord--you get stuck with the costs and unpaid utilities tenants leave behind. You get to sure them and--maybe--get your money. This is why it is necessary to obtain a sufficient deposit and to do a thorough background check.

And also to have enough cash flow to cover the costs, should a tenant stiff you.


Sorry I can't tell you what you want to hear.

 

[gkisystems]

I'm form another northern state with Cold Weather rules, so I did a little digging. The utility company CAN turn off power during the cold season, but there is a procedure they must follow. The cannot turn off power during the winter months if the customer has entered into and remains compliant with a payment plan. It sounds as if even if your tenant had entered into a a payment agreement, they probably are no longer in compliance with the payment plan and would be subject to shut off.

(Hence, reason one they called to pull the utility from their name.)

Now, you are the one stuck with that bill. Your recourse as the landlord? Evict, then sue for any unpaid rent and the utility costs you've been stuck with. Since you are the landlord, you cannot simply turn off the power because you a) want to protect your investment; and b) it's illegal for you to do so--constructive eviction, I think is the term.

(Reason 2 that they called to put the utility in your name.)

To answer the question: The utility company has no responsibility in this situation. You can't make them pay. You need power to the home to prevent the pies from freezing and other cold weather damages, and they can't violate their policy on you say-so. (Seriously, what would stop any third party from calling the utility and saying the person responsible for the bill at 123 Brown street is Bill Gates, so please send hime the monthly bill? See my point?)

I understand that eviction and suing is recourse, but only in theory. A tenant that can't pay the bill the first time won't magically be able to pay it the 2nd time when the court issues a judgment. Yes, I do need some utilities going to the home to prevent the pipes from freezing, but that would cost me around $50-80/month to maintain the temperature around 50 degrees vs. $400 to maintain it at a nice and toasty 80 degrees (the tenant likes it warm) with all the lights turned on and everything plugged-in. I'm just having trouble understanding why it would be legal for the power company to force me to be their collection agency (or ruin my good credit) for a bill generated by the tenant and not me.

For example, if somebody steals your cell phone and makes expensive foreign calls at huge price mark-ups and you have called the cell phone company to inform them that the phone was stolen, the cell phone company can't make obsene profits off criminal activity. So, why should the power company?

 

[FarmerJ]

Have you called your states public utility agency to see what they have to say about your complaint with the electric company ? have you called your states attorney generals consumer services to ask them why it is okay for the elect co to put the bill into your name with out your consent? those are the two places I would begin to complain loudly!

 

[Gail in Georgia]

I'm with FarmerJ on this one....how come it's OK for the electric company to automatically put the electric in YOUR name (without your permission) simply because the tenant calls them up and tells them to take the power out of their name?

Are you on some program that you've signed up where this is done automatically so you, as the landlord, avoid a reconnection cost between tenants (we have that option here and I've said "no thanks" for fear of what you are going through)?

If you don't want the power shut off for fear of pipes freezing due to cold weather (a situation that will likely cost you MORE to repair than what you are paying for now) then you eat the cost of the power until you can get these deadbeats out through eviction and hope you can get some of these funds back either through their security deposit or suing them. If not, you consider taking what's left off next years taxes as an expense deduction.

Gail

 

[gkisystems]

Have you called your states public utility agency to see what they have to say about your complaint with the electric company ? have you called your states attorney generals consumer services to ask them why it is okay for the elect co to put the bill into your name with out your consent? those are the two places I would begin to complain loudly!

I have not, but that is a good suggestion - thank you! My guess is that the utility company would argue that I did give them consent to put the bill in my name and cite that I have instructions on file with the utility company to automatically put the bill in my name when the tenant moves out. The problem is that the tenant is the one who informs the utility company that they moved out, not me and the utility doesn't do any verification to confirm the tenant has actually moved out. To make matters worse, the utility company refuses to put the bill back in the tenant's name at the landlord's request even if the landlord informs the company they are in error. So, this opens the door to fraud and abuse.

I did ask the utility company if they can call me or send me a notification electronically (text message, email, etc) when they get notice that the tenant is moving out and transferring the bill into my name, but they refused to do this. The only choice they give me is when the tenant says take the bill out of their name, it can go in my name or they can turn service off completely. However, if service is turned off, my pipes could freeze - so both options are not good options.

 

[CSO286]

I'm with FarmerJ on this one....how come it's OK for the electric company to automatically put the electric in YOUR name (without your permission) simply because the tenant calls them up and tells them to take the power out of their name?

Are you on some program that you've signed up where this is done automatically so you, as the landlord, avoid a reconnection cost between tenants (we have that option here and I've said "no thanks" for fear of what you are going through)?

If you don't want the power shut off for fear of pipes freezing due to cold weather (a situation that will likely cost you MORE to repair than what you are paying for now) then you eat the cost of the power until you can get these deadbeats out through eviction and hope you can get some of these funds back either through their security deposit or suing them. If not, you consider taking what's left off next years taxes as an expense deduction.

Gail

Ok, I'm not saying it's right, but many utility companies--esp water/power--city type utilities require that they know if a property is used as a rental,and then they ultimately hold the landlord--as property owner--responsible for any charges. So, if they know that a property is a rental and the Tenant vacates, the account automatically reverts back to the LL's name.

In reality, what they should do is contact the LL to verify the property status.

But I don't make the rules.

 

[Gail in Georgia]

"Ok, I'm not saying it's right, but many utility companies--esp water/power--city type utilities require that they know if a property is used as a rental,and then they ultimately hold the landlord--as property owner--responsible for any charges. So, if they know that a property is a rental and the Tenant vacates, the account automatically reverts back to the LL's name."

True (and earlier this week I commented on a posting regarding this issue) but that involves utilities handled by the city (or county) where they do not have the manpower to hunt down deadbeat tenants who move out owing past bills. This is not the case with large utility companies such as power or gas companies unless, possibly, smaller co-op owned companies.

Gail

 

[STEPHAN]

For example, if somebody steals your cell phone and makes expensive foreign calls at huge price mark-ups and you have called the cell phone company to inform them that the phone was stolen, the cell phone company can't make obsene profits off criminal activity.

SO you think the cell phone company deserves to pay the bill if you have your phone stolen? They also have to pay their provider ....

 

[FarmerJ]

Its really messed up to have to go this route but Id suggest you use the links above and have a attorney craft for you a new lease form that gives to you the right ( a limited power of attorney???? or where you become the tenants agent ) to contact the electric & gas Utilities where you are the one who will start the account for them and you would be the one who closes the account or maybe talk to a atty so the atty can word for you a separate from damage deposit deposit form that would dedicate x amount to unpaid utilities or just live with no more rollover agreements that cover vacancies and utility services and then up you damage deposits to the maximum you can and see if you can find a insurance company who has some kind of modified renters type of policy that would still pay you in case a tenant did not maintain utilities /heating to a minimum that would prevent the house from freezing up. But do see what your states atty generals consumer services desk has to say as well as your states utility regulatory agency.