What is a Landlord-Tenant Utility Agreement?
A landlord-tenant utility agreement is a legal contract that can be incorporated into a residential lease agreement. This agreement outlines the responsibilities of both the landlord and tenants regarding utility payments—such as water, gas, and electricity.
Why Include a Landlord-Tenant Utility Agreement in a Residential Lease?
Adding a utility agreement into the lease ensures that landlords and tenants are on the same page when it comes to paying for specific services. The approach to dividing up these utilities can vary depending on the type of rental property. For multi-unit properties, landlords may choose 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. There are several ways to go about this. For more control over payments, landlords can cover all utilities under one account and include the tenant’s portion in their monthly rent. Alternatively, landlords may ask tenants to send payment directly to the utility companies.
For single-family homes, utility costs are typically covered by the tenants.
What to Include in a Landlord-Tenant Utility Agreement
This agreement should clearly state which utilities will be covered by the landlord, which ones are the tenant’s responsibility, and the method of payment for those utilities. Landlords should include the following information in their agreement:
- Type of Agreement – The heading and opening should state that this is a landlord-tenant utility agreement.
- Lease Date – For residential leases, the date of the original lease should be included.
- Agreement Date – Landlords should include the date that the agreement is signed and goes into effect.
- Name and Address – The names and addresses of both the landlord and tenants should be included.
- Signature and Date – The agreement should be signed and dated by both the landlord and tenants.
- Details of Services – Landlords should provide details regarding which services they will be providing and which are the tenant’s responsibility.
- Payment and Billing – Landlords should clarify the method of payment to be used and when payment is due.
- Start and End Dates – The start and end dates of the agreement should be included.
Some cities have local laws surrounding utility use—such as requiring a specific waste service provider to be used. Landlords should make sure to research local laws and regulations before creating their utility agreement.