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Finance topics:
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Utility Billing FAQs by landlords
How many of the City's single-family residential properties are rentals?Bloomington has 24,000 single family properties served by municipal utilities. Of those, 5 percent, or 1,237, are rental properties. Utility bills must be in the name of the owner and may be mailed to the owner's home or business address. Why are City utilities the responsibility of the property owner, when it is the tenant or occupant using the water?State law recognizes that the primary parties to the water supply transaction are the City, as supplier, and the property benefited by water service availability. Minn.Stat. 444.075, s.3(e), authorizes the City to charge the owner and to certify unpaid charges against the property served as a tax. Minn. Stat. 325E.025, s.2, distinguishes other types of utility services (such as electrical, gas, propane, and telephone) from water utilities, recognizing that water utilities provide a unique benefit to the property and are essential to human habitation. In fact, the law prohibits owners from renting out any premises without a connection to the water system. Gas, electric, propane and phone utilities provide a benefit primarily to the end user - accordingly, the landlord is not responsible for their payment and unpaid charges cannot be assessed against the property. State law also recognizes that part of the charge for water utilities recovers the cost of the infrastructure and its maintenance. Minn. Stat. 444.075, s.3(a). Does the City have authority to make me responsible for utilities used by the tenant?Ultimately, if City utility bills remain unpaid, state law allows the City to assess the charges, penalties and interest against the real property served by the utility. This is consistent with the concept that it is the property that receives the benefit of the utility service, not simply the user. Minn. Stat. 444.075, s. 3(e) states: The governing body may make the charges a charge against the owner, lessee, occupant or all of them and may provide and covenant for certifying unpaid charges to the county auditor with taxes against the property served... Minn. Stat. 116A.22 provides: Charges established for connections to and the use and availability of service from any water or sewer or combined system, if not paid when due, shall, together with any penalties established for nonpayment, become a lien upon the property connected or for which service was made available. written notice shall be mailed to the owner of any property as to which such charges are then due and unpaid, stating the amount of the charges and any penalty thereon and that unless paid the same will be certified...and assessed as a tax...upon the property for collection with and as a part of other taxes... What difficulties has the City encountered in billing the property's tenant?Almost all of the problems experienced by City utility billing staff with tenant billed accounts revolve around the fact that the City is not a party to the lease and has no knowledge about its specific terms. Some of the problems include: ...The City does not have the ability to identify and track the tenant. The landlord controls the rental relationship, not the City, and can manage the risk inherent in the rental of the property by being selective when choosing a tenant and establishing the lease terms and manner in which rent is collected. Often, the City is not told of a change in tenancy until the new tenant receives the utility bill months later. Then the City's ability to collect from the old tenant is limited because its service area is limited to the City. Where the old tenant moves out of town, the City has no leverage (such as threat of shut off in the new location) with which to require payment, unlike regional utility companies with broad service areas. ...The landlord controls the lease to which the city is not a party. The landlord can fashion the lease to fit the creditworthiness of the tenant. Landlords have the authority to require a security deposit for the last month's utility charges and to make non-payment of utilities breach of the lease and grounds for eviction. Lease agreements differ in their apportionment of the responsibility for municipal utility payment, particularly at the point where a tenant moves out. ...Tenant billing involves city staff in disputes over usage. Tenant occupancies do not coincide with City utility billing periods, hence a great deal of staff time is currently devoted to apportioned billing between outgoing and new tenants. This is an additional service, outside our normal billing cycle for which the City has yet to charge a fee. ...Tenant billing complicates the city's ability to assess. Tenant billing is inconsistent with the City's ultimate collection tool -- assessment against the property. It creates an unnecessary legal issue as to proper notice of the delinquency and opportunity to pay prior to the start of the assessment process. Why are City Utility charges like street assessments?In providing both services, the City must protect the public health, safety and welfare. It does more than provide water to make buildings habitable, it also must protect the water supply. Like streets - the water system is part of the City's infrastructure that has to be maintained and kept safe. The water bill reflects these other duties too. Will the City continue to shut off the water for non-payment?Yes. If you receive a disconnect notice please call utility billing staff as soon as possible. 952-563-8726. Can I still have the bill sent to my property manager?Yes. A copy of the agreement between the property manager and the owner including the owner's signature must be provided to the Utility Billing division. The owner's name must also appear in the billing address. Where can I have my bill sent?Any address where you can regularly be reached -- such as your home or business address. What happens if I don't pay the bill by the due date?You will be assessed a late fee of 5 percent of the total amount due and owing. What constitutes a "delinquent bill"?When any portion of the balance exceeds 30 days past due and no arrangement for payment has been agreed to by the Utility Billing Division. What, if anything, happens before the City disconnects?You and the occupant will be sent a written notice 15 days prior to shut off that will state the reason for disconnection, the date of shut off, the amount past due, as well as the amount currently owing on the account, including late fees, service charges and penalties, along with the amount of any required security deposit. You and your tenant will have an opportunity to contact City staff prior to the date of shut off. What if the current tenant was not the user for the water reflected in the entire bill, is the water still shut off?You, as the owner, are responsible for the bill. If tenants pay the delinquent bill to avoid disconnection, that payment may qualify as rent under Minn. Stat. 504B.215. How much has to be paid to reconnect water shut off for non-payment?The TOTAL amount due for all City utilities, plus all service charges, late fees, and penalties and the cost of both the disconnection service call and reconnection service call must be paid. If service has been disconnected 2 or more times you may also be required to pay a security deposit prior to re-starting the water. Can the property still be rented without water service?NO. See IPMC at Sec. 505. It's considered unfit for habitation. When will the City require a deposit?When there is a previous past due balance owing on any City utility account or property held by the property owner, a history of delinquencies, where the property owner has filed for bankruptcy or there has been a water shut off for nonpayment. How much will it be?A minimum of $50 up to the amount of the greater of: 2 average consecutive utility bills in the past 12 months or $250. What happens to the security deposit?If any of your City utility charges are not paid by their due date, the City is authorized to automatically draw on the deposit in the amount due. If any account of yours remains overdue for 85 days, the City must use the deposit to pay the bill. When the City draws on the deposit, do I have to replenish it?Yes. You will be sent a notice of the amount required within 25 days of the draw. It will also warn you that if you fail to replenish in this amount, your water will be shut off after 30 days. Do I ever get the deposit back?Yes, if you have not filed for bankruptcy. Interest will be paid as dictated by state law. First you must have a 12 consecutive month period of prompt utility bill payment to the City. If you are in bankruptcy, the deposit will continue for the duration of that proceeding, but thereafter if you pay on or before City utility due dates for 12 consecutive months -- we will release the deposit with interest. Deposits will also be released minus the final bill if you terminate all business with the City's Utility Division.
For more information, contact:
Utility Billing Section
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