Let me explain.

With a vacant rental property, I need to transfer utilities back into my company name to turn on power and water. Electricity was easy to set up online, but when I contacted the water company, they told me I had to come to their office in person. That seemed unusual since this is typically set up and service started through my online account.

When I arrived, I was shocked to learn there was an outstanding water bill of over $1,800 on the property. The tenant had never set up a water account when she moved in. Instead, she manually turned the water on at the meter—without approval. Normally, unpaid bills result in service suspension within 1–2 months, but in this case, she had been stealing running water for nearly two years. How was that possible?

The customer service representative explained that due to COVID policies at the time, the water company was not allowed to shut off service—even though the tenant had never officially opened an account.

At first, I thought I’d be stuck with the $1,800 bill. Fortunately, the rep told me that if I provided a copy of the lease proving the tenant’s occupancy, they would waive the charges and restore service. I did and even gave them the tenant’s new address, but they said they couldn’t take any further action. Situations like this are one reason utility bills keep rising for everyone.

I had trusted the tenant when she said she had closed her utility accounts. I never thought to verify directly before refunding her $1,000 security deposit. That mistake nearly cost me.

THE POLICY CHANGE

To prevent this from happening again, I made three changes to our rental policy.

Lease Agreement

• I updated the lease agreement in the security deposit section with a simple but effective rule that leaves no wiggle room:

  “Landlord reserves the right to verify utility account closures directly with the utility provider before processing any security deposit refund. Any outstanding balances will be deducted from the security deposit.”

Moving In

• Call the utility companies to confirm tenant has set up new accounts (gas, water, power)

• Tenant is still required to provide a photo of each new account established in their name

Moving Out

• Call the utility companies to confirm closure of all utility accounts and in good standing

• Tenant must provide a photo copy of final statements showing a $0 balance

I still call the utility company despite receiving a photocopy from the tenant because of the risk of photo manipulation using AI. You can’t always trust that the document provided is authentic.

Since implementing this policy, I haven’t had further issues. A small change saved me from a potential financial headache, and now, I ensure every tenant follows the same process.

If you’re a landlord, do not make the same mistake I made. Always verify utility accounts closures before refunding deposits.