Join Australia's most dynamic and respected property investment community

Tenant paying water

Discussion in 'Property Management' started by ADLInvestor, 21st Mar, 2016.

Tags:
  1. ADLInvestor

    ADLInvestor Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    98
    Location:
    Adelaide
    Hi All,

    A question for LL's and PM's out there. For those of you that have the tenant paying all water costs, do you have the bill paid from your rent and then get reimbursed when the tenant pays it?

    This is what happens in our current situation, and i find it a bit strange TBH. I thought that if the tenant pays all water, then we shouldn't be paying it at all out of our rent we receive?

    Thought i would find if this is normal or not before asking the PM why it is setup this way.

    Thanks!

    Nathan
     
  2. Big Will

    Big Will Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,559
    Location:
    Melbourne, Australia
    What state is the IP in? As each state has different regulations,
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,563
    Location:
    Sydney or NSW or Australia
    @D.T. - one for you by the sounds of it.
     
    D.T. likes this.
  4. Chrispy

    Chrispy Well-Known Member Premium Member

    Joined:
    21st Jun, 2015
    Posts:
    300
    Location:
    Melbourne
    In Victoria water is put in to Tenants name. Owner pays rates , tenant pays for usage

    In my Queensland townhouse it does not have seperate meter so Owner pays
     
  5. jim1964

    jim1964 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    674
    Location:
    At tha beach
    This is what i do.SA Water bill comes in,i pay the sewer contribution which i am required to pay, the balance being the water usage and the supply charge.I then ask my manager to bill the tenant the balance,if payment has not been made by the nominated payment date, ring SA Water and keep extending the date till you are paid mid/end of month.I always felt like a Bank or the tenants credit facility paying the whole bill and chase the reimbursement.
     
  6. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,588
    Location:
    Adelaide, SA
    Its up to you, but best options imo are :
    a) Pay the bill yourself then scan it to the PM so that they can invoice their portion(s) onto the tenant, or
    b) Have the bills from SA Water go directly to the PM so that they can pay it on your behalf, then invoice their portion(s) onto the tenant.

    You'd do A if you wanted to pay from borrowed funds for either tax deductible purposes or for credit card reward point purposes. B is easier though from a landlord perspective as then you don't have to scan them.

    Refer Tenancy Tip Thursday - Who pays water? for more info.
     
  7. ADLInvestor

    ADLInvestor Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    98
    Location:
    Adelaide
    Thanks @D.T. and everyone else for you help, greatly appreciated. The IP is in SA. We currently have B) happening in the situation you've outlined DT.

    Was just a slight kick with the tenant having a $427 water bill come out o_O
     
  8. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,588
    Location:
    Adelaide, SA
    If its lots higher than usual, check if there was a once off reason or a leak?

    One strategy is to encourage tenants to pay a little extra with their rent each week to towards water bill.
     
    jim1964 likes this.
  9. ADLInvestor

    ADLInvestor Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    98
    Location:
    Adelaide
    Excellent strategy. Didn't even think of that!
     
  10. Xenia

    Xenia Adelaide Property Manager Business Member

    Joined:
    21st Jun, 2015
    Posts:
    2,347
    Location:
    4/136 The Parade Norwood, South Australia
    Hi Nathan

    The main reason why it is paid first is that it is in your name, it is your bill so you cannot rely on a 3rd party to do the right thing by you and pay a bill that has your name on it. What if they don't?

    I have been active in the past in lobbying government changes to get water invoices put directly into the tenants name like electricity, gas, internet, it is a consumable item so why is it only in the landowners name?
    SA water will receive more income in forms of connection charges if they invoiced tenants directly but that is not enough to incentivise a change so 11 years on - no changes. Handling SA water invoices is not our favourite thing to do in property management. In fact we all hate it, including tribunal members and bond refund people who deal with all sorts of issues arising from this.

    Water arrears are handled similar to rent arrears, tenants served breach notices etc.

    Also please consider (it causes so much confusion with landlords at times) that the tenant has a number of days to pay their portion after they are sent the invoice so it may not be in the same statement as the one where the SA water invoice was paid.
     
  11. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,588
    Location:
    Adelaide, SA
    Do you allow same number of days in arrears as with rent or different? I've seen a mix among some agencies.
     
  12. Xenia

    Xenia Adelaide Property Manager Business Member

    Joined:
    21st Jun, 2015
    Posts:
    2,347
    Location:
    4/136 The Parade Norwood, South Australia
    it's tricky with water invoices because they are not as much in terms of $$ as rent arrears and there is no definite legislation.

    we will send breach notices after 14 days.

    However to take it further to a tribunal hearing - legal action, We do a set amount - when it reaches $300 in arrears then we begin to take legal action on landlord instructions to do so. This also depends on the landlord. Remember $69 tribunal fee to chase arrears so it is not worth doing for $50 unpaid water invoice.

    some landlords prefer to leave to end of lease. We have one that is $800 in arrears bond is $2820, landlords instructions are - no action but bond refund for the outstanding amount at end of lease. Tenant is not in arrears with rent - never has been, but for some reason he does not like water invoices.

    also insurance does not cover water invoices so repercussions are minimal if a landlord denies taking legal action. We generally advice them to not allow it to go over 50% of the bond.

    Every office is different and also every situation and needs of the landlord are different too.

    One of our clients is a Barrister and he has crossed off our ability to handle arrears on his behalf in the management agreement. His instructions "I will take over at that point" tenants have never been a day late for anything but would be interesting to see how he would handle it.
     
    D.T. likes this.
  13. MyPropertyPro

    MyPropertyPro SE Qld Property Management & Investor Services Business Member

    Joined:
    1st Jul, 2015
    Posts:
    224
    Location:
    Australia
    It is definitely different state by state. My properties in Victoria are probably the best with the fixed charges being invoiced to me and the usage being billed direct to the tenant, much like the electricity etc. as Xenia has suggested.

    As an investor, it really depends how you want to have them processed and how much work you want. To avoid scanning, another option is having them direct debited (to ensure they're paid) and then having electronic invoices sent you. That way, all you have to do it press 'forward' to send to your PM when the time comes. Of course, you will then have to record the payment for your own tax purposes as it won't be included on your PM statement which is a consideration for many investors.

    Andrew