This week our blog will focus on utilities & the AZ Landlord-Tenant Act. The Act states that your lease agreement must clearly list what utilities are the responsibility of the tenant. Additionally, the lease should specify whether the tenant is responsible for putting the utility into their own name. Often times with multi-family properties the utilities stay in the owner’s name. When this happens it must be disclosed in the lease if the units are individually sub metered. Additionally, you can have the tenant pay for their usage as well as any costs associated withe the sub metering. Be sure to always send the tenant a copy of the invoice. Also, keep in mind that if your property isn’t sub metered and you decide to sub meter you must give the tenant notice.
If the properties aren’t sub metered then the owner must use one of more of the following billing systems:
- Per tenant meaning that each tenant receives their own bill
- By square footage taking the entire bill and dividing by total square footage to then get a price per square foot; that number is then multiple be the total size of each unit
- Per type of unit so one bedrooms have a set price, two bedrooms higher price etc. With this option each type must have the same price
- Per number of water fixtures; we have never known anyone to use this system because typically all one bedrooms would have the same number of fixtures so option 3 would be much easier
No matter the system that you use you can only charge the tenant for their cost and you can’t add a mark up.
For a full copy of utilities & the Arizona Landlord-Tenant Act click here.