Under Ohio law, landlords can be held responsible for a tenant’s unpaid water bills. A municipality has the power to place a lien on the property and collect the payment through property taxes or bring a lawsuit against the property owner to recoup the money.
Unpaid bills can mean a large financial loss for the city, so government leaders have a high incentive to collect. For example, a 2013 investigation in Toledo found that the city was owed almost $24 million in unpaid water bills. If cities seek to recover these missing funds from property owners, a landlord's credit and bottom line can both be affected.
As a result, landlords should take some proactive steps to protect themselves and reduce their liability for a tenant's delinquent bills, such as:
- Perform credit checks on prospective tenants as part of a background check. This can eliminate potentially risky tenants who might be unable to pay a bill.
- Consider requiring a co-signer for some tenants, such as students with limited income.
- Rather than putting water service in the tenant's name, put the service in the landlord's name and charge additional rent to cover the cost of water.
- Modify the lease to make a continued tenancy contingent on the payment of water bills. If the tenant does not pay the water bills, landlords may be able to begin eviction proceedings.
- In order to monitor and prevent potential problems, ask the utility company to send the landlord a copy of the tenant’s monthly bills.
- Educate and encourage tenants to check for leaks or prevent wasteful water practices in order to reduce the possibility of unusually high bills.