When it comes to who should pay utilities for a rental unit, landlord or tenant, there are several options to consider. No law in Minnesota stipulates which party should be responsible for paying utilities. So, both parties should agree on which utilities will they intend to pay. This agreement should be clearly outlined in the property’s lease with the appropriate language dictating utility responsibilities. A landlord is not required to cover utilities for a tenant.
Why cover utilities? Some landlords prefer to cover utilities as it offers them more control over the bills. Additionally, this allows landlords to keep track/account for any costs associated with their property’s utilities. This also ensures utility bills are paid on time. Should the tenant vacate without paying utility bills, you would immediately assume responsibility as an owner of the property. Including utilities in the rent helps protect your bottom line should a bill go unpaid.
Rent should reflect utilities covered. If you plan on assuming the responsibility of your tenant’s utilities, you should cover the cost appropriately in the amount of rent you expect. The same goes for if you expect tenants to cover all of their own utilities, i.e. rent should be less expensive.
Do a cost analysis. You will want to look into what utilities will cost you more to cover. For example, Minnesota traditionally has a colder winter and sometimes a warmer summer. Therefore, you may want your tenants pay for their metered utilities, such as heat and electricity. Should your tenant use a lot of heat in the winter, the cost of paying the bill may put you at a disadvantage if you choose to cover it.
Covering utilities may look more attractive to renters. Having certain utilities included in the rent may be more attractive to prospective tenants than a property without utilities included. This affords some security to renters on a fixed income and guarantees utility bills will be paid on time.
Do you include utilities in your rent? Comment below!
