What is a Landlord-Tenant Utility Agreement?
A landlord-tenant utility agreement is a legal contract which clarifies and outlines the responsibilities of both landlord and tenant when it comes to utility payments (such as water, gas, and electricity). Most often, a utility agreement is incorporated as an addendum to a residential lease.
Why Include a Landlord-Tenant Utility Agreement in a Residential Lease?
A landlord-tenant utility agreement confirms that the landlord and tenant have a shared agreement and understanding about who pays for what when it comes to utility services. The approach to dividing up utilities can vary depending on the type of rental property. For multi-unit properties in particular, it is useful for landlords to specify which services they will cover and which will be the responsibility of the tenants.
How Should Landlords Approach Utility Payments?
Once the landlord decides how utilities will be divided, they can choose a payment method. For more control over payments, landlords can cover all utilities under one account and include the tenant’s portion in their monthly rent (although some jurisdictions may instead require a shared utilities agreement that specifies how the landlord apportions utility charges). Alternatively, landlords may ask tenants to send payment directly to the utility companies.
For single-family homes, utility costs are typically covered directly between the tenant and utility provider(s). In such cases, it may be helpful to specify that the tenant has sole responsibility for all utility services on the property.
What To Include in a Landlord-Tenant Utility Agreement
A landlord-tenant utility agreement must specify who pays for which utilities, and the method of payment for those utilities. Landlords should include the following information in the agreement:
- Type of Agreement – The document should open stating that it is a landlord-tenant utility agreement
- Lease Date – Utility agreements for residential leases should include the date of the original lease
- Agreement Date – The date that the agreement is signed and goes into effect
- Name and Address – Contact information for both the landlord and tenant
- Signature and Date – The agreement must be signed and dated by all parties
- Details of Services – Specifies the manner in which the parties are responsible for the different utility services
- Payment and Billing – Specifies the method of payment to be used and when payment is due
- Start and End Dates – When the agreement terminates, plus the start date (if different from the agreement date)
Some cities have local utilities laws, such as an ordinance requiring residential properties to use a specific waste service provider. Landlords must draft utility agreements in accord with all applicable laws and regulations.
