One of the less-discussed challenges of being a landlord is dealing with unpaid bills left behind by previous tenants. While many tenants are responsible and leave their accounts in good standing, others may move out with outstanding utility bills or other debts attached to the property. Knowing how to handle this situation is crucial to avoid financial complications and protect your rights as a landlord.
This guide will walk you through the steps to take when faced with unpaid bills from former tenants, explain how to safeguard against future occurrences, and detail how Fraser Bond can assist landlords in navigating these issues.
When a tenant vacates a property, any outstanding utility bills or service charges are typically their responsibility, not the landlord’s. However, complications can arise if tenants fail to settle their accounts. The key point to remember is:
However, if the utility provider is unaware of the tenant’s departure or the change in responsibility, they may incorrectly try to charge the landlord or the new tenant. This can lead to disputes that can be time-consuming to resolve.
Check the Tenancy Agreement
The first step is to review the tenancy agreement. In most cases, this will outline the tenant’s responsibility for utility bills and any other property-related expenses during their stay. Ensure that the tenant was aware of their obligations and that the agreement clearly stated which bills they were responsible for.
Gather Documentation
Once a tenant moves out, it’s essential to have a record of their tenancy end date. You should:
Providing this information to utility companies can help clarify that the outstanding bills belong to the previous tenant.
Notify Utility Providers
As soon as a tenant leaves, notify the relevant utility companies and provide them with the final meter readings and the tenant’s forwarding address (if available). This ensures that the accounts are closed in the tenant's name, and any unpaid balances are their responsibility, not yours.
Contact the Former Tenant
If unpaid bills come to your attention after the tenant has vacated, you should attempt to contact the former tenant. Politely remind them of their outstanding obligations and encourage them to settle the debts to avoid potential legal action from utility providers.
Speak to Utility Companies
If you receive bills addressed to you or the property itself, rather than the tenant, inform the utility company that you are not responsible for the charges. Provide them with the move-out date and the tenant's details, if possible, to ensure they chase the right party for the outstanding debt.
Even after notifying the utility companies, issues can persist. If utility companies continue to pursue you for unpaid bills, there are steps you can take:
Provide Evidence
If the utility provider incorrectly attributes the debt to you, present them with the evidence of the tenancy end date and meter readings from the date the tenant vacated. This documentation should be enough to demonstrate that the tenant, not you, is liable for the outstanding amount.
Involve a Property Manager
A professional property management service, like Fraser Bond, can take care of notifying utility providers, handling disputes, and keeping accurate records, saving you time and reducing the stress of dealing with unpaid bills.
Debt Recovery from Tenants
In cases where you have lost contact with the tenant, and they have left substantial unpaid bills, you may consider involving a debt collection agency. Though this may seem like a drastic measure, it is an option if the tenant refuses to pay or cannot be contacted.
While dealing with unpaid bills can be frustrating, there are several steps landlords can take to prevent similar issues from happening in the future:
Clear Tenancy Agreements
Make sure your tenancy agreement clearly outlines the tenant's responsibility for utility bills and services, and any consequences of non-payment. It is crucial that both parties fully understand the terms.
Regular Meter Readings
Take meter readings at the beginning and end of every tenancy. This ensures that there is no ambiguity about the tenant's usage during their stay, and you can easily provide this information to utility providers if necessary.
Tenant Referencing
Conduct thorough tenant referencing before signing a new lease. This can help you identify any past issues with unpaid bills or financial irresponsibility.
Use a Property Management Service
Engaging a property management company like Fraser Bond can take a significant burden off your shoulders. A good property manager will ensure that all utilities are transferred into the tenant’s name, maintain records, and handle disputes on your behalf. This ensures that any unpaid bills are dealt with swiftly and without involving you directly.
At Fraser Bond, we provide a full range of property management services designed to protect landlords from issues like unpaid bills and tenant disputes. Our services include:
Whether you need help resolving unpaid bills from a former tenant or are looking for ongoing property management support, Fraser Bond has the expertise to assist you.
Dealing with unpaid bills from previous tenants can be a complex and time-consuming issue for landlords. However, with the right steps—such as keeping thorough records, notifying utility companies promptly, and ensuring a clear tenancy agreement—you can avoid many common pitfalls.
Fraser Bond offers expert property management services to help landlords prevent and resolve issues with unpaid bills and other tenancy matters. With our support, you can focus on maximising your property’s profitability, while we handle the details.
