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Landlord 101 – Water Bills

I’ve said before that tenant quality has been deteriorating. I talked about it a little in my post at Million Dollar Journey about Good News For Landlords & Investors. It used to be that most tenants paid their bills religiously. Because of the increasing number of water bills not getting paid, at some point the City of Toronto decided in all their great wisdom to get the landlords to be responsible for these bills.

Transferring the City of Toronto Water Bill

What a hassle! For a while they had a special form you would sign and the tenant would sign so that the water could be transferred to the tenant. Then you had to mail or fax it in. Utilities all over the world have developed a great system for completing this process over the phone. Clearly this process was too simple for the city. I also have no idea why it was required for the landlord to sign the form as well. It’s pretty fair to say that random people do not call in to transfer any bills into their name unless they have to.

Now You Cannot Do It At All

The landlord is always responsible for the water bill. The best you can do is designate someone else to receive the bill. Her’s the link to the City of Toronto site where you can designate a tenant. It also costs $16 per bill to get the bill mailed by the city.

Inherently Unfair

Fundamentally there is a serious problem with holding the landlord who does not use the services responsible for paying for those services. Utility companies have a lot more power to collect money for services rendered. First of all they can with hold more services until arrears are paid. Secondly as a large company, they have access to collections and credit reporting.

How I handle Water Bills

What happens is that I chose to keep the bill going to the owner. The owner faxes the bill to me when it comes in and I arrange for the tenant to pay it. It might be easier to designate the tenant as a recipient, but most landlords are frugal. I agree that asking the tenant to pay an extra $16 just to get a bill mailed is too much. Instead I have this awkward complicated system.

Disturbing Trend

There have been other attempts to transfer responsibility from the tenant to the landlord. Utility companies have discovered what landlords are already quite familiar with. Deadbeats won’t pay bills. Rather than lose the money or try to collect it from the tenants they’d much rather find someone collectible like the landlord. This adds insult to injury. Usually the landlord has already taken a financial hit themselves from the tenant not paying rent. Next they’ll get an additional bill for water from the City of Toronto.

Transfer Utilities Before giving the Keys

A cautious landlord will verify that the tenant has transferred the utilities before handing over the keys. Once the tenant moves in there is no guarantee they will call in and get it transferred over to themselves. If they don’t you cannot turn it off! This would be withholding vital services. If it takes you a while to figure out that the utilities have not been transferred it may be assumed that you have agreed to be responsible.

This happened to a landlord I spoke to who was not aware that the bill for the gas had not been transferred or paid because the bill went to the rental address. She also had a verbal lease. She had to pay all the balance for the entire tenancy… or they were going to cut services to her house and obviously ruin her credit as well. Obviously the tenant was also not paying the rent!

Sucks to be a Landlord

Basically utilities and other companies are very aware that they would much rather charge the landlord than the disappeared tenant. You have much more ability to pay than they do. Landlords are rich! Aren’t they? You can also look forward to more of this type of offloading of liabilities in the future. Believe me they’ll do it if they can get away with it. Don’t let them…the squeaky wheel gets the grease.

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