Including Utility as a part Of Rent? Key Things to Note.

Utility Bills in Rent Agreement A Good Idea

Time and again, homeowners have to make a tough call on whether to exclude or include utility bills in the rent agreement. As per experts, it is advisable to make a detailed list of all the pros and cons beforehand, to make an informed and wise decision based on our ultimate preference.

Including utility as part of the rent agreement may, undoubtedly, appear to be a diligent decision but if not exercised carefully, can give rise to discrepancies and cause a capital loss in most cases. In this blog, we highlight a few key things that one should keep in mind about utility bills and avoid any uninvited trouble.

1. Never include Variable Utility Bills

Water and electricity consumptions vary depending on the tenant's needs and usage. As such, keeping these essential utility bills as part of the rent is not a good practice. Some homeowners even set some fixed rates for these utilities in the rent agreement itself. However, fixing on flat rates or fixed rates is a practice that homeowners must avoid.

Water and electricity should be separately metered for tenants. This will not only help avoid frictions but would also make the tenants cautious and careful about their consumption. Most importantly, it would ensure that homeowners do not pay out of their pockets for careless tenants.

2. Include Fixed-Rate Utility Bills

Fixed rate utility bills include internet connection, intercom, waste disposal, maintenance costs, etc. Homeowners can add them as part of the rent. It ensures that homeowners stay in charge and remain answerable to all matters.

However, this practice has some disadvantages too. The overall rent may increase, which may not be attractive for all buyers. Additionally, homeowners need to make sure all the payments are on time, as well as all grievances are promptly resolved.

3. Keep an Eye on Rental Markets

Utility-included rent can have a negative impact too, more so if the rentals in and around the property do not include utility bills. The rent at first glance may appear considerably higher and force potential tenants to maintain a safe distance from the property. In the worst of cases the property may receive bad mouth publicity too.

4. Utilities-Included is an Outdated Practice

Utilities-included rent is mostly associated with old apartments that offer minimum amenities. As such, the services and value on offer are limited by default. When compared with modern day apartment, utilities-included may not be as good an idea as it might sound. Considering this, homeowners must refrain from including utility bills with rent agreements and prevent paying for the bills out of their own pockets.

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