Too Easy-Going

This post stems from a current issue we are facing in our business. Let me elaborate:

Case Study

We had a new tenant-buyer move into one of our mobile homes and land properties in June of this year. The previous tenant-buyer could no longer afford to pay the rent, so we offered “Cash for Keys” to avoid going through the formal eviction process and the result was the home in better condition than the day we sold it. However, there was a minor issue with the central A/C so we turned the electricity on so that our A/C guy could fix the issue.

If the electricity is still in our name on the day of closing (like it was in this case), we ask the tenant-buyer to put the electricity in their name within a week of moving in.

Fast forward to three months later and the electricity is still in our name. We have been paying the electricity and then adding that amount to the tenant-buyer’s monthly rent payment. I should add that they have been paying on time. It hasn’t harmed us financially but obviously we are not a utility company and would rather avoid this accounting headache.

Rental Agreement

In our rental agreement, it states that the lessor (us!) are not responsible for the electricity; however, this is a bit vague. I have since added that if the electricity is turned on in our name, they have 5 business days from the date of closing to get the electricity transferred in their name or we’ll shut it off (be sure to check your state laws.)

We also do a <a target=_blank href="http://www.biggerpockets.com/renewsblog/2013/09/06/easy-landlord-tips/" title="5 Easy Landlord Tips …read more