What should I do if my tenant is not paying their water bills or has not transferred water?

The lease agreement will state whether the landlord or tenant is responsible for the utilities. Most cities allow tenants to start accounts in their name, but a few cities mandate that the landlord keep utilities in their own name.

Tenants who do not pay their utility bills pose a significant risk to your investment. Unpaid water bills stay with the property, and delinquent bills may even roll over to your property taxes. Keeping utilities in your name, but leasing the property for a higher rent, is one way to reduce the risk of your tenants falling behind on their bills. If you do want the utilities to be the tenant’s responsibility, there are a few enforceable policies to incentivize tenants to pay their bills:

  1. Risk of shut-off
    If tenants aren’t paying their bills, the utility provider will issue warnings of a shut-off, with the intention of prompting payment. Depending on the provider, it can take months to actually turn off the water, giving time for the bill to creep up.
  2. Lost of security deposit
    If the tenant has unpaid water bills at the end of their lease, you can deduct the outstanding balance from their security deposit payment
  3. Termination of lease
    By not paying utilities or transferring utilities into their name, the tenant may be in violation of their lease agreement. According to Michigan law, this gives the landlord the authority to send a 30 Day Notice and start eviction proceedings. If the tenant complies with their lease during those 30 days, the notice may be cancelled. If the tenant does not comply, they will face eviction
What do I need to get started?

First, you'll need to provide the following information about each property so we know it's ready for our management:

  • Name of owning entity.
  • Employer Identification Number (EIN) of owning entity, if owning entity is a company.
  • Articles of Incorporation of owning entity, if owning entity is a company.
  • A copy of the deed.
  • Proof of insurance with Verdei listed as co-insured.
  • Proof of rental registration: Verdei requires that each property has a valid rental registration. Please note that if Verdei is not listed on your registration documents, we will not receive any direct notifications for upcoming inspections or blight violations. You can read more about our policy here.

Property Access:

  • Keys: We must have the keys to the property, whether it's vacant or tenanted. You can send us a copy of the keys using the KeyMe app, or you can mail them to the nearest office. Alternatively, we can pick up the keys from a local representative.

Here's what we need for each vacant property:

  • Is the property rent-ready? Verdei manages properties that are already in rent-ready condition. If your property needs significant rehab, Verdei can't take over until the rehab is complete.
  • Utilities: All utilities at the property must be on and in your name. We've created guides for DTE (gas and electric) and DWSD (water and sewer) that explain how to get utilities turned on. Download them here.

Here's what we need for each occupied property:

  • Tenants' contact information: We need a phone number or email address so that we have a way to reach out to the current tenants and welcome them to Verdei.
  • Copy of current lease: We need a copy of the tenants' current lease. If the lease is valid, we're obligated to continue enforcing it until it expires, even if ownership or management changes.
  • Information about the security deposit: We need to know who has the security deposit. If you have it, you'll need to transfer it to us. If your previous manager has it, we can work with them to receive it, although we may need you to authorize the transfer from them to us.

Please note that we are not able to enforce tenants’ back balances when transitioning a property to Verdei. If a tenant owes back rent to a previous manager, we will have to disregard that amount and start fresh when bringing the property over to Castle.

Additionally, you'll need to provide the following personal information:

  • Your name and address.
  • Your Social Security Number if you have one, or your passport number if you don't.
  • A copy of your photo ID.

 

What condition does a property need to be in before Verdei can take it on?

Castle specializes in the management of properties that are ready to rent. We don't do rehabs or major construction work, so a property needs to be rent-ready or near rent-ready before we can assume management. The three lists below - Standard Maintenance, Non-Standard Maintenance, and Major Maintenance - give all the issues that would prevent a property from being rent-ready.

If you know your property is not rent-ready or near rent-ready, we can recommend contractors who specialize in larger projects and rehabs. Just add your information here and we'll reach out!

If you believe your property is rent-ready or near rent-ready, we will conduct a walkthrough when we start management to confirm the state of the property. If the property meets all our criteria for rent-ready, we will start listing and marketing it for rent.

If our walkthrough finds issues, there are three possible outcomes, detailed below.

Standard Maintenance

If the property only requires standard maintenance, we will repair all issues as part of normal management, with no additional charges beyond the cost of the repairs. The following issues fall under standard maintenance:

  • Keys do not open all doors
  • Lawn not maintained
  • Outside has trash and debris
  • Garage not clean
  • Light bulbs missing
  • Outlets missing covers
  • Smoke and CO detectors missing
  • Cleaning needed
  • Doorknobs not in good condition
  • Screens missing or not in good condition

Non-Standard Maintenance

If the property requires non-standard maintenance, we can secure one bid to repair all issues for a fee of $150 (on top of the cost of maintenance). Alternatively, we can pause management while you make the repairs yourself or with one of our trusted contractor partners directly. The following issues fall under non-standard maintenance:

  • Porch, steps, or walkway not in good condition
  • Floors not in good condition
  • Walls not in good condition (including issues with paint)
  • Fixtures missing or not in good condition
  • Appliances broken
  • Not all doors and windows secure and in good condition

Major Maintenance

If the property requires major maintenance, we will pause management while you make the repairs yourself or with one of our trusted contractor partners directly. The following issues fall under non-standard maintenance:

  • Mold or mildew
  • Furnace not running (but gas and electricity are on)
  • Hot water tank not running (but gas and electricity are on)
  • Backed up or broken sewer line
  • Cracked foundation
  • Roof issues of any kind

Utilities and Compliance

Additionally, we require utilities to be active and registered in the name of the owning entity, as well as the property to be compliant and registered as a rental property before we assume management. If you are not familiar with the utility or registration status of your property, you can contact the relevant utility department that services your property. If you want Castle to handle utilities turn-ons for you, please refer to this article for DTE, this article for DWSD, and this article for city compliance.