How Should Landlords Handle Utilities and Payments?

Responsibility for utilities must be clearly outlined in the lease, specifying whether costs are paid by the tenant, the landlord, or shared between units.

Tenant Paid Utilities
If tenants are responsible for utilities such as electricity, gas, or internet, the lease should clearly state this. Tenants should be told to set up accounts in their own name before moving in. Providing provider contacts can make this easier and avoid delays.

Landlord Paid Utilities
Some landlords choose to include certain utilities, like water or heating, in the rent. If so, the lease should specify what’s included and whether usage limits apply. For example, you might cover water but reserve the right to address overages caused by excessive use.

Shared Utilities
In multi-unit properties, landlords may apportion shared utility costs based on square footage, number of occupants, or another agreed system. The lease should document how charges will be calculated and when payments are due. Transparency is key to fairness.

Billing and Payments
The lease should outline the billing process. If tenants pay providers directly, they’re responsible for timely payments. If the landlord collects utility payments, it’s essential to clarify whether they’re included in the rent or billed separately and to provide a payment schedule.

Preventing Disputes
Clear communication is the best safeguard. Outline responsibilities in writing, review usage regularly, and keep copies of utility bills and correspondence. Proper documentation helps resolve disputes quickly if they arise.

The Fox Marin Team assists Toronto landlords in drafting clear lease agreements that specify utility responsibilities, reducing confusion, avoiding disputes, and protecting property investments.

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