Well my water billing company just informed us that very few of my tenants have bothered to pay the water bill. We are just getting into the second month of them having to pay the sub metered water.
Not sure what to do here. Any ideas?
They say they can shut off the water, but not lock it so that’s worthless.
I’m looking at evicting most of the park. Maybe the private billing company was a bad idea.
I guess we could let them read the meter and collect the water bill as part of the rent
Any ideas really appreciated.
EDIT: yes, it’s a third party billing company that collects the water payment. I do have a clause in my lease that states that cost pass through’s such as water, etc. are considered rent.
Is the park full of renters? If so, you will probably have to evict some (or most) of them. Start with a few who also are taking this opportunity to not pay lot rent. Others will get the idea.
If these people are homeowners, then you can probably work with them since they will not want to move their home just because they do not like having sub-metered water.
Send them a notice reminding them that they are now responsible for paying for water. Include what ever documentation necessary showing what they owe. Tell them they need to pay by a given date or you will begin eviction proceedings.
You do not need to work with them they require a strict training regiment to teach them their new responsibilities.
Im not sure how it works with a third party biller as that is what it sounds like here.
I think if the park bills for water, you could see if you could apply their payment to water first then rent so they come up short on rent, non payment, then evict. You would want to check to see if this is or is not permissible though.
Cities usually lock out but if a 3rd party biller does have that option, seems like there really is no incentive for them to pay if there is no enforcement
My only comment is behavioral changes takes time. In addition to the notices if the Manager can knock on everyone’s door and let them know this is legit and if they don’t pay they will get evicted it should be okay after 3 months.
I suppose evicting someone now would speed up the change, but being in Florida who knows the hoops you would have to go through legally. You may want to check to see if there is some sort of procedural law for this type of thing - wouldn’t surprise me.
I should have added that I have it in my lease that pass through costs such as water are considered rent.
I like the idea of applying it to the water bill first.
I think the main problem is that they are supposed to mail the payment into the 3rd party billing company. I’m going to change that. We will start collecting the water bills as part of rent immediately.
Coach, I don’t have the same problem as you but I think the solution to our problem might help a little. In one of our parks, we started out doing a water bill and trusting that the residents would be able to add the water bill, trash bill, and rent up to produce payment that was of the appropriate amount. For example:
We’d send them a bill for $28.91 and expect them to be able to add the $14 trash and $325 lot rent to that. Clearly, this sounds pretty stupid now that I type it. What we generally had were more than 50% of the people who either overpaid or underpaid each month.
Our solution was to invoice everything together since we were already sending them bills. This pretty much solved all of the issues. I think that if you send your bills out with water and rent together, it will probably work. I’d definitely try it before losing your mind and shutting off everyones water. Maybe that can be step two after you figure out what you are actually allowed to do in FL.
I would also add that it might even be possible that they don’t know what this bill is for (or why it isn’t coming from you) since it’s coming from a third party.
Not to hog this post, but there are benefits to having your manager read the meters for you. For one, our managers have been able to identify leaks inside of homes or under homes simply by seeing the dial turning when a tenant isn’t home. This has saved our residents from some pretty nasty water bills and saved us the hassle of having to squeeze the money out of them. I doubt you’ll get this level of service with a third party. A second benefit is that it forces the manager to walk the property, go in between the homes, go to some of the places you can’t see if you are driving the park, etc. This is a great opportunity for them to note rules violations and get the residents back in compliance.
The process of billing the water is pretty simple.
To get started, you need to create a spreadsheet that allows you to enter the reading. This spreadsheet will auto-calculate the billing amount against the usage. You will also need to create an invoice template. From there it’s a simple process:
Send an email to the manager to remind them to read the meters.
Have the manager send you the readings once it is complete.
Enter the readings in the spreadsheet.
Look for higher than normal usage and email the manager to go back out and confirm the readings on those units.
Finalize the bills into an invoice via mail merge.
From this point forward you will have to distribute the bills in whatever way that works for your systems. If you mail them, this is when I would involve a third party print company to print, stuff, and stamp. A local provider should be able to do it pretty cheaply. Here’s a sample of what we send out.Lot 17.pdf (34.1 KB)
“Yes, it’s a third party billing company that collects the water payment.”
“…the main problem is that they are supposed to mail the payment into the 3rd party billing company. I’m going to change that.”
We have a Turnaround MHP that sends out Water Bills. We read the Water Meters on the 15th (15th - 15th) and then send out two Bills (Water Bill & Rent Bill).
My recommendations would be:
Do NOT Turn Off The Water
Send A New Water Bill From The MHP (With The Payment Being Sent To MHP) Stating That If This New Water Bill Is Not Paid Within “X” Amount Of Calendar Days Then The Eviction Process Will Start
Start The Eviction Process On Everyone Who Has NOT Paid Within “X” Amount Of Calendar Days
Once Individuals Receive Eviction Letters It Is Amazing How The Money Suddenly Appears
Fire The 3rd Party Billing Company
Have Your Manager Read The Water Meters
Have The MHP Send Either Two Invoices (Water Invoice & Rent Invoice) /OR/ One Invoice (Water & Rent Invoice) From The MHP With The Payment Being Sent To MHP
Have The Invoices State Your Late Fee & Eviction Policy Such As (Change Dates Below To Work With Your MHP):
Water Bill - Due The 1st: X Amount
Water Bill - Postmarked 6th-10th: Y Amount (Includes Late Charges)
Water Bill - Postmarked 11th Or After: Z Amount (Includes Late Charges & Eviction Process Will Start)
It is quite possible that your Tenants do NOT understand that the 3rd Party Water Billing Company is legitimate.
@Coach62 , you indicated that you are going to change that and will start collecting the water bills as part of the rent immediately.
In Texas for example it is not legal to require tenants to pay water bills prior to rent (to apply the “rent money” to the water bill “first”). Regardless of what the lease says.
Landlord utility regulations can be a thorny issue – I’d run it by a lawyer. But that’s just me.
See (if you are interested) Texas Administrative Code Chapter 24 Subchapter H section 24.125(j) “Payment by tenant. Unless utility bills are paid to a third-party billing company on behalf of the
owner, or unless clearly designated by the tenant, payment must be applied first to rent and then to
utilities”
I agree, we send a detailed invoice and coincide the meter readings with the rent. So the 22nd, they are getting a bill that has what the total charges are so then when they mail in a payment a few days after they receive the bill, its the exact amount of the invoice. We also have a stub that they send in with the payment ( kind of like a lot of bills you get) and that is just generated via the accounting/management software.
My managers read the meters and send the results to a 3rd party billing company. Then, the residents receive a bill that shows their lot rent, water, sewer, and garbage. They all have deposit slips which they take to the bank in town and put into my account. Utilities and late charges come out before rent and this is perfectly legal in OH.
Previously, they sent their checks to the billing company, but no longer. Everyone is happier with depositing directly to the bank. They have to put their lot number on the deposit slip, so it is super easy to track. I also use the date the payment shows up in the bank account as the date received - not when they claim to have made the deposit.
Yeah, that’s a much better system. That’s what we’re going to start doing, except we’ll collect it in the office for now. After the turnaround is complete, we’ll either go to a Frank system where they mail it in to us, or do as you do and have them deposit it into our bank.
I think its better to implement what you want right from the start. Especially if you are getting a lot of new tenants , they will be taught once and not need to be re taught if you decide to change it.
We put the Water/utility cost on the same invoice as their monthly rent with one combined total. It is incorporated into our lease agreements. If they dont pay the full amount, serve them a 3 day pay or quit (or whatever your locality requires), if they dont pay, evict them.
When transitioning a MHP to sub-metered tenant paying their own utilities: A new mind set has to be implemented; Including communications with the residents why their is a urgent need to curb the community’s ever increasing use and cost of water and sewer service; and gain the residents support to the community’s new proactive water conservation measures. We offer resident education as part of the transition process.
Many third party billing services, including our company Southern Water Management, allows a manager complete access to a utility billing cloud service, in which the manger simply inputs the residents’ meter reads, bills are generated, along with consumption comparisons, leak information;The manager can include the water/sewer bill with the rental invoice. Accounting and regulatory compliance is handle by the third party billing service. Depending on the number of accounts the cost is @ $5 per account billed to the resident.
Water and sewer consumption is 25 to 35% less when residents are responsible for their own use. In some cases, for going a rental increase in lieu of residents paying for their own water sewer service is more palatable than increasing rent annually just to stay even with the escalating utility costs. For example, say water/sewer runs $75 per home when the landlord pays, when the resident pays, the cost is $50, drop the rent by $50 (or for go an increase) the landlord is still better off by $25. Obviously, rental increases or residents paying for their own water/sewer is an uncomfortable situation, but is necessary to keep a MHP a viable business.