Does the Landlord Pay the Water Bill?

One of the most common questions landlords and tenants have is who is responsible for paying the water bill. Unlike electricity and gas which are almost always the tenant’s responsibility water bills can be a gray area. There are pros and cons to both the landlord and tenant paying the water bill. This article will examine whether it is typical for landlords to pay water bills or pass that cost onto their tenants.

Overview of Utility Responsibilities

When renting out a property, the landlord and tenant need to agree upfront on who will be responsible for various utility costs. Here is a general overview:

• Electricity – Tenants virtually always pay electricity bills directly. Electrical service is in the tenant’s name.

• Gas – Natural gas for heating, cooking, etc. is almost always a tenant expense. The gas bill is in the tenant’s name.

• Waste/Garbage – Most landlords cover waste removal and have dumpsters on site.

• Cable/Internet – Tenants pay for cable TV and internet service unless it is provided free as an amenity

• Water – Water responsibility varies and should be addressed in the lease

• Sewer – Sewer costs are often bundled with water bills.

Deciding whether the tenant or landlord pays the water bill depends on several factors. We’ll look at the pros and cons of each approach.

Landlord Pays the Water Bill

In many rental properties, landlords choose to cover water expenses rather than passing those costs onto the tenant. There are some good reasons why a landlord may want to pay the water bill:

Simplicity – With the landlord paying water bills, it’s one less utility for tenants to setup and manage.

Marketability – Including water in the rent makes a rental more attractive to prospective tenants.

Cost predictability – Landlords can budget for water bills more easily than tenants. Usage may vary month-to-month.

Bill control – The landlord maintains control over the water account rather than relying on tenants to pay on time.

Maintenance issues – A landlord who oversees the water account can monitor for unusual spikes that may indicate leaks.

Tenant disputes – With a shared water meter, it avoids tenant arguments over splitting bills.

Property control – During vacancies, the water remains active for showings, repairs and maintenance.

Lien avoidance – The property avoids liens if tenants fail to pay water bills.

As you can see, there are certainly some compelling reasons for landlords to pay and maintain control over the water bills. In many cases, absorbing the cost of water is worth it for the convenience and risk avoidance.

Tenant Pays the Water Bill

Even with the benefits of the landlord paying the water bill, there are also some good reasons to have tenants cover water expenses:

It’s customary – In most rental properties, tenants expect to pay utilities like electricity, gas and water.

Saves landlord money – Passing water costs onto the tenant reduces operating expenses for the rental property.

Incentivizes conservation – Tenants may be more inclined to conserve water if they are paying the bill rather than the landlord footing the cost.

Simplifies lease terms – Rather than bundling water costs into rent, itemizing utilities separately can be more straightforward.

Pass-through costs – For commercial properties, triple-net leases pass water and all utilities onto the tenant.

Tenant has control – Tenants manage their own water account rather than relying on the landlord.

Reduces landlord duties – The landlord avoids the administrative hassle of paying each property’s water bills.

As you can see, there are definitely some scenarios where it makes sense for the tenant to be responsible for water expenses.

Typical Practices for Water Bills

The most common practices landlords follow for handling water bills include:

• List who is responsible for water in the lease agreement so there is no confusion.

• In single-family rentals, tenants often pay all utilities including water.

• In multi-family units, landlords typically pay water bills for the entire property.

• If units are individually metered, tenants may pay their own water.

• In commercial spaces, tenants virtually always pay the water bill.

• If landlord pays water, the costs may be included in the overall rent rate.

• If tenants pay water, the lease specifies they must maintain active water service.

• Landlords often handle sewer since it is tied to water service.

State and Local Regulations

Landlord and tenant responsibilities for utilities like water are typically not covered under state landlord-tenant laws. However, some locations may have local ordinances that address utility billing practices. For example, some cities require:

• Landlords to pay for water/sewer bills on rental properties

• Landlords to keep water on in vacant units

• Tenant utility accounts in the tenant’s name

• Disclosure of utility average costs to prospective tenants

Before deciding your policy on water bills, check if there are any state or local laws regarding utilities that you need to follow. Consulting with a local property management attorney can help clarify the regulations in your area.

Outlining Responsibilities in the Lease

To avoid any disputes over who pays the water bill, make sure to outline responsibilities clearly in the written lease agreement. Here are some tips when addressing utilities:

• Specify if landlord or tenant will handle water/sewer bills

• List any utilities such as trash, sewer that are bundled with rent

• Disclose average water/utility costs if tenant is responsible

• Explain payment procedures for tenant-paid utilities

• Include consequences for non-payment of utilities

• Adhere to any state or local utility billing regulations

Spelling out utility payment policies and procedures upfront prevents confusion down the road.

Best Practices for Handling Water Bills

If you are unsure whether landlords or tenants should be responsible for water bills at your property, keep these tips in mind:

• Follow norms for your property type (single-family, multi-family, commercial, etc.)

• Check your state and local laws regarding utility billing practices

• Consider your budget and whether paying water bills impacts your bottom line

• Factor in the administrative work required for you to manage water bills

• Assess if excluding water from rent could deter prospective tenants

• Evaluate if tenants paying water bills incentivizes water conservation

• Include clear utility payment policies and expectations in all leases

Handling water bills correctly maximizes rental profitability while keeping both landlords and tenants satisfied.

Who Pays the Water Bill?

Deciding whether to make landlords or tenants responsible for water bills depends on the property situation and local regulations. Discussing expectations upfront and outlining policies clearly in lease agreements prevents disagreements later. With sound utility billing practices, landlords can operate profitable rental properties where tenants have affordable, well-serviced accommodations.