Understanding Bill Payment as a Landlord

Author
YNM Real Estate
Date
19 December 2021
Category
News

Regardless of the type of rental property, its location and size, whether it is a detached house or strata, a townhouse or a houseboat, there will be bills to pay. There are a host of utilities that landlords and tenants must keep paying to continue using those services. It needs to be ascertained who is responsible for which payment. There can be special arrangements between the landlord and the tenant, just as there are some standard terms of lease as well.

In most residential lease or tenancy agreements, the landlord pays for the installation of electricity, water and gas services. This doesn’t come into play if the property has been around for a while and has been rented out a few times or even once. This applies only to new properties getting new connections for necessary utilities. Considering that the supplies of these utilities are already installed, the landlord pays for the electricity and gas unless the supplies to the rented property are metered separately. Landlords also pay for water and sewerage services excluding the pumping out of the septic tank.

If the electricity, gas and water supplies are metered separately then the lease agreement needs to clearly state that the tenant will be paying those bills. If the tenant doesn’t pay them separately, the landlord must account for such expenses in the rental amount. However, given the fluctuation these bills undergo, it is unlikely for landlords to account for such expenses in the rental amount unless there is only one meter for each of these supplies. In almost all cases, tenants pay for pumping out the septic tank.

Common areas that are lit, have water supply or gas supply are beyond the tenant’s living area or the area of the property that the tenant has occupied. Such common areas would not be paid for by the tenant. In strata, the common areas are paid for through the monthly or yearly maintenance charges. In standalone properties, the landlords absorb this cost and obviously factor in a bit of it in the rental amount which is paid from the commencement of the tenancy term.

Strata or council fees and maintenance charges are almost always paid for by the landlord unless otherwise agreed upon in the lease agreement. Since the landlord remains the owner on paper in the strata or council body, it is befitting for them to be the payer on record, even if the tenant makes the requisite payment to the landlord.

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