Utilities charges

Rick asks:
(updated on Monday, September 02nd 2019)

Is it legal to leave the power, water and gas in the landlord’s name and for the landlord to charge a set fee to each individual tenant who uses those services and, if so, what should that fee be? Is there a rule of thumb or average that other landlords charge? We are charging $25 per person per week but I have heard that some tenants pay $37 or more. The property is in West Auckland.

Our Experts Answer:

Normally a tenant is responsible for the utilities that they use. However, the landlord can agree with a tenant that the rent includes the cost of utilities and the landlord absorbs any overrun in cost that may result. When you speak of “each individual tenant” who uses those services, I take it that you are referring to each tenant who is a signatory to the tenancy agreement. As long as the tenant agrees to the additional utilities charge, there should not be a problem.

However, in the case of water, the landlord may not charge a tenant for water unless it can be established how much water the tenant has used. If there is one meter per property, you cannot use an averaging formula for charging water usage. You must charge the metered amount that the tenancy has used. The best way of handling this division is by having a rent that is acceptable to landlord and tenants and by agreeing that the tenants do not pay for utilities as the cost is included in the rent. That, however, does not take account of variable usage by the tenants.

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