Junk fees included in lot rent


#1

I purchased a park a year ago that billed back for electricity, sewer, and trash (water is so cheap it isn’t worth charging for it).

The park also charged residents a $10 per month ‘service charge’ which is marketed as an administration charge for all of the necessary utility billbacks.

I’m considering just removing that charge and increasing lot rent $20 instead of the planned $10 this year. It just seems like the service charge is too sneaky and non transparent.

Does anyone else charge any peripheral fees like this and have any insights?


#2

I see mom & pops charge this kind of stuff a lot. Personally, I would rather avoid any appearance of deception but maybe someone else has more insight on the subject.


#3

I think it depends on the state utility sub-metering laws. In Texas we are not allowed to charge anything additional for electric services but I think we are allowed to charge an admin fee for water sub-metering. I would suggest you read the state sub-metering regulations and just follow those or decide if it’s included in the lot fees.


#4

I would think it’s much better to have the money included as rent as opposed to administrative fees. When it’s time to sell or refinance, the increased rent will be capped and raise the value of the park, an administrative fee won’t.


#5

I try to charge for everything I can charge for.

Plus it’s easier to advertise lot rent of $325 + utilities than $350. By the time they sit down to sign up for the park they will not care about a few extra fees.

I charge, Water, Sewer, Trash, Elec, Gas, storage, parking spaces, shed rentals. If I think I can charge for it I will.

Another Reason for charging itemized fees is you don’t have to give out a rent increase notice to change the fee. For example if your trash bill goes up by $5.00/space in one year. You will have to hand out a Rent increase notice to adjust the rent. If you have it separated out you can adjust the trash bill immediately.

I do not think you should charge an “Admin Fee” just raise the rent for that one.