Rent and utility payments: how to arrange that?

  • Updated

The rental agreement includes many possible methods for handling utility bills:

  • The tenant pays the utilities on their own

In this option, utility bills are formally issued to the landlord, but come directly to the rented apartment. The tenant has to pay them on their own. This means you'll get to save time, but you won't have control over whether the bills are actually paid.

  • Utilities are included in the rental fee

This method is transparent to the tenant, but if they are not frugal, you may risk having to incur high costs. You will also pay tax on the costs included in the rental fee.

  • Utilities are paid by the landlord and billed to the tenant

You have full control here, but you will spend more time dealing with the bills. Also, some bills arrive late and the lease may end before you receive a given bill (we recommend that you charge an advance payment for the last period and settle it when the real bill becomes available).

  • The tenant is charged a utility deposit

Here, an estimated utility deposit is collected each month and accounted for at the end of the lease by comparing the total deposit with the real costs. Make sure to document the meter readings every month if the service provider does not keep monthly records.

  • Transferring utilities to the tenant

Although this requires additional work and issuing some notifications at the start, the final result is that both parties gain a sense of security. The tenant is sure that the landlord is not overinflating the declared utility bills. It also reinforces the tenant’s sense of responsibility in the rental relationship. Additionally, the landlord does not have to bear the risks and suffer consequences in relation to the service providers if the bills are not paid.