Renting a property enables a property owner to earn additional income. However, it is necessary to take care of certain legal aspects, which helps safeguard the rights of a landlord. A rent agreement is a crucial document, signed between a landlord and a tenant, which protects the interests of both parties. It must include clauses that clearly define the tenant’s financial obligations, such as payment of utility bills. However, there may be cases where a tenant leaves the property without clearing these expenses. In such cases, a landlord may take legal action against the tenant. In this article, we discuss the possible options a landlord can consider if the tenant leaves without paying the utility bills.
Check these rent agreement clauses landlord, tenants must include to avoid disputes
What should landlords do when tenants leave without paying utility bills?
Contact tenant
The first step that a landlord can take is to contact the tenant by phone, email, or letter and send them a reminder about the outstanding utility bills and request payment. It could be possible that the tenant may have forgotten about the payment, or they may have delayed the payment due to financial difficulties or other reasons. In such cases, reaching out to the tenant and sorting out the problem is a mutually beneficial approach.
Deduct expenses from security deposit
Typically, tenants are required to pay a security deposit equivalent to two months’ rent before renting a property. This amount is refundable at the time of vacating the property. However, if the amount is yet to be settled, the landlord has the option to deduct money from the deposit to cover the unpaid utility bills. However, one should note that this clause must be mentioned in the rental agreement.
Send legal notice
The landlord has the right to send a legal notice to the tenant through registered post with a return receipt. The purpose of contacting tenants and the action that will be taken against them if they do not settle the dues within a specified time should be mentioned in the document.
File court case
If the tenant does not respond and settle the dues within the specified period, the landlord can file a case against them in a court despite repeated reminders. Adequate evidence proving the tenant’s failure to pay the utility bills must be presented. A copy of the legal notice sent to him serves as proof.
Get court order
In case the court observes that the evidence is in the landlord’s favour, an order will be issued directing the tenant to settle the dues. This order will serve as a judgement against the tenant and gives the landlord the legal right to recover the unpaid utility dues from the tenant’s assets.
Follow court order
In case the tenant fails to settle the bill despite the court’s ruling, the landlord is allowed to implement the court order.
What happens if a tenant leaves without paying utility bills?
- If a tenant leaves the property without paying the bills for gas, electricity, water, etc., the utility company can disconnect the services due to non-payment. This can have a negative impact on the landlord in terms of finding new tenants or potential buyers.
- The tenant will be held responsible for paying these expenses even if they have vacated the property. They may have to face legal action.
How to avoid scenarios where tenants default on paying utility bills?
- Add clauses in rent agreement: Make sure the rent agreement clearly outlines the tenant’s responsibility for utility payments and the consequences of non-payment. This helps avoid possible disputes.
- Reach out to utility companies: The landlord can check with the utility distribution company, and if the gas or electricity bills show pending bills, they can directly contact tenants.
- Monitor meter readings: Landlords can keep track of the electricity and gas meter readings and address any discrepancies that could arise.
Are landlords responsible for unpaid utility bills?
If the tenant’s name is on the utility account, landlords are not responsible for the payment of unpaid utility bills. However, landlords will be liable to pay the bill amount if:
- The utility accounts are registered under the landlord’s name.
- The rent agreement contains a clause that mentions that the landlord will be accountable for paying the utility bills.
Housing.com News Viewpoint
Many landlords face issues when tenants vacate their properties without clearing the utility bills. They must address such issues by contacting the tenant as the first step to understand the reasons. They can then decide if action must be taken against the tenant. However, to avoid such disputes, it is essential to have a well-drafted rent agreement.
FAQs
What action can be taken if a tenant doesn't pay rent?
If the tenant fails to pay rent, the landlord can deduct amount from the security deposit or take legal action.
What should you do when a tenant refuses to vacate?
If a tenant refuses to vacate a property, the landlord can file an eviction suit in a civil court under whose jurisdiction the property is located.
What notice is sent to a tenant to vacate due to non-payment of rent?
A landlord should consult a legal professional and send a notice to the tenant before approaching a court.
Can a landlord cut the electricity supply to a non-paying tenant?
A landlord does not have the right to disconnect electricity due to a non-payment of bills by the tenant. According to a 2023 Supreme Court ruling, electricity is a basic amenity, and no person can be deprived of it.
What to do when a tenant leaves without paying utility bills?
If a tenant fails to pay the outstanding utility dues, the landlord can issue a legal notice to the tenant. The document should mention the consequences of the tenant's failure to pay bills within a specified timeframe.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
Harini is a content management professional with over 12 years of experience. She has contributed articles for various domains, including real estate, finance, health and travel insurance and e-governance. She has in-depth experience in writing well-researched articles on property trends, infrastructure, taxation, real estate projects and related topics. A Bachelor of Science with Honours in Physics, Harini prefers reading motivational books and keeping abreast of the latest developments in the real estate sector.
