Shared Utilities Agreement

A shared utilities agreement is a legal contract between a landlord and a tenant that can be incorporated into a residential lease agreement. This agreement specifies which utilities will be shared with another unit or common area within the building.

Why Include a Shared Utilities Agreement in a Residential Lease?

• Specify which utilities are being shared
• Disclose the method for calculating utility charges
• Explain any additional service fees (if applicable)

Should Landlords Put a Cap on Utility Use?

Buildings with shared utilities arrangements may run into issues such as tenants overusing utilities. In these cases, landlords may decide to put a cap on certain utilities to prevent tenants from either overpaying or underpaying for services. For example, the utilities agreement could state that if the monthly bill exceeds a certain amount, the landlord will include any overage in the tenant’s next rent payment.

What to Include in a Shared Utilities Agreement

Landlords should include the following in a shared utilities agreement:

• Type of Agreement– The heading and opening should state that this is a shared utilities agreement.
• Lease Date– The date of the original lease should be included.
• Agreement Date– Landlords should include the date that the agreement is signed and goes into effect.
• Name and Address – The names and addresses of both the landlord and tenants should be included.
• Signature and Date– The agreement should be signed and dated by both the landlord and tenants.
• Landlord’s Disclosure – The landlord should disclose which utilities will be shared by multiple units
• Payment – The Landlord should include information on payment, including additional fees and when it is due.

It is important to note that certain areas prohibit the use of a shared metering system—meaning that tenants are not required to pay utility costs outside of their personal unit. Landlords should research local laws and regulations beforehand.

More Property Management Templates

No Smoking Lease Addendum

Parking Space Lease Agreement

Pest Control Addendum

Residential Liability Waiver Addendum

Smoke and Carbon Monoxide Detector Addendum

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