Real Estate

Utilities in rental suite

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  • Feb 14th, 2018 10:41 am
[OP]
Jr. Member
May 24, 2009
177 posts
7 upvotes

Utilities in rental suite

I'm purchasing a brand new house, and planning to rent out the basement suite. As a first time landlord, I'm wondering how we're supposed to separate the utilities bills between us and the tenant. Do all houses have separate meters? Do we need to get something special installed? Any help would be appreciated :)

Thanks
11 replies
Deal Addict
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Mar 9, 2012
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Kitchener
canucksfan19 wrote:
Dec 27th, 2017 12:31 am
I'm purchasing a brand new house, and planning to rent out the basement suite. As a first time landlord, I'm wondering how we're supposed to separate the utilities bills between us and the tenant. Do all houses have separate meters? Do we need to get something special installed? Any help would be appreciated :)

Thanks
You can do separate meters if you want - but meters would need to be installed. It's almost easier to do all-inclusive, so you include utilities in your rent. Most houses only have 1 meter. (well, technically, 3 meters, one for gas, one for water, one for electric). Obviously gas would be impossible to separate completely. My understanding in a regular house, generally you can only separate electricity though I guess water might be possible too.
Deal Addict
Nov 13, 2013
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OTTAWA
The severance cost can be a lot. Just budget for the basement suite to use a ton of utilities if it is included in the rent as they very well might.
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Sep 4, 2005
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Toronto
Usually as a landlord you pay water as it gets rolled into your tax bill if the tenant doesn't pay for it. As for gas and electricity you can pay to have the utility companies to come install a second meter, but those costs can easily be $3-5k just to have the meter installed. That ignores the fact that you'd need a second electrical panel and that you would have to ensure you have separate your gas lines/electrical lines for upper vs lower untis. So what I'm trying to say is that it makes no financial sense to split out utilities unless you are building the building from scratch or doing a very very large reno.

It makes more sense to provide the rental unit with utilities all included. You would list out which utilities on the lease and put in a clause to try to cover yourself against having your renter hook up space heaters or bitcoin mining rigs to suck up the power. Obviously charging more rent than you would if the utilities would be under the tenants name. Also assume that the tenants will use more than you anticipate. Because they will leave windows open and run space heaters in the winter time.

Alternatively you can word the lease to include partial (x% of) utilities for gas, electricity, internet, whatever you want. So every month you would forward the tenant a copy of all the bills and they would be responsible for paying you x% of the bill on whatever schedule you agree on. The only drawback here aside from it being annoying to message them to get them to pay you non-constant bills, and if they don't pay you eventually have to take them to court and make the interim payments in the meantime.
Deal Addict
Jul 29, 2006
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just have them pay x% a month.

Most people do 1/3 utilities for basement tenant across the board.

For me I include internet as part of their rent, but they pay 1/3 in water, gas, hydro, and garbage fees.
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Sep 8, 2007
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Way Out of GTA
All inclusive rental deals are awesome!

Mine away!
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Deal Fanatic
Oct 26, 2008
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BC
A builder in Vancouver will normally have 2 electric meters installed for a new house in Vancouver if it really is a legal suite.

And the suite won't be heated by gas like the main part of the house. Water, including hot water, probably common so that shared cost does need to be estimated.

If it is not a legal suite, estimate on the low side for the tenant's shared cost to avoid any disputes down the road, while covering yourself for shortfalls when you set the monthly rent in the rental agreement.
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Nov 10, 2015
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I rent out a basement suite in my house and charge the tenant 25% of the electricity. Natural gas is not an issue, just electricity. I found out the hard way how tenants abuse things if they aren't paying their share.
Every two months when my hydro bill comes, I give them a copy of the bill as well as an invoice for 25% of it.
You could do the same with hydro and/or natural gas.
Diversity is Our Burden
Jr. Member
May 4, 2007
122 posts
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I charge the tenant 25% of gas and electricity, basically to encourage them not to waste.

I have never had any problems with the gas bill - it has been pretty much the same usage on a comparable month basis for any tenant that I have had.

For one tenant the electricity usage was about 50% higher than for the others. Never worked out exactly why because they were not doing anything obviously wasteful. Presumably just a number of smaller things adding up (extra small fridge, more use of washer/dryer, leaving lights on).

By charging a percentage I at least got some of this extra back, but obviously not all of it
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May 4, 2007
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macnut wrote:
Dec 27th, 2017 12:25 pm

And the suite won't be heated by gas like the main part of the house. Water, including hot water, probably common so that shared cost does need to be estimated.
If the heating is with hot water, the suite can easily be heated with gas - either on a separate or common meter. But that has to be built in from the start.

In theiry, you could heat a legal suite using forced air heating but it would require a separate furnace in a fire separated room so I doubt that it would be done.
Newbie
Feb 13, 2018
5 posts
I think you should have separate meters to avoid any conflict of interests. If you have a mutual understanding, you could share, but I recommend getting a different meter for your electricity at least.
Deal Addict
Jul 4, 2004
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Ottawa
As others have indicated, the easiest thing to do is just figure out an all-inclusive price and charge that but you could also have an agreement that they pay you a portion of the bills (I don't like this as much since it means you have to get payment after the fact).

Depending on the age of the house and how the wiring was done and the space in your electrical panel, it might not be that hard or expensive to add a separate meter (i.e. if there are no shared wiring between the main house and the basement unit) but personally, I don't think it's worth the hassle.

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