Who should pay for the utilities: landlord or tenant?

While there are no rental legislation in Singapore about who should manage and take care of the utility bills of the rented property, the responsibility typically rests on the tenant. However, there are situations where the landlord chooses to manage the bills himself.

Let’s take a look at the pros and factors to consider when it comes to deciding whether to include or exclude utilities in the monthly rent. Use the following quick links to navigate to the information most relevant to you.

Option 1: The landlord includes utilities into the monthly rent

Pros
1. Streamline payments for both yourself and tenant

By having the tenant pay one lump sum (rent plus utilities) every month makes the collection process simpler for yourself. No separate or additional collection of utility bills is required and no potential disagreement over the cost of a particular utility bill. Landlord-tenant relationship remains amicable and everyone wins.

2. Hassle free for the tenant

For tenants looking for a fuss-free way of paying rent, having the utilities included in the monthly rent amount relieves them of having to manage and deal with the payment themselves. This could turn out to be an attractive bonus for a prospective tenant who is viewing the property - you, the landlord could potentially be closing the rental deal faster.

3. Potential revenue increase

If what the tenant pays you in utilities exceed the actual usage cost, this means you’re getting additional income.

  • things to consider
    Utility usage

    Be aware that the tenant may use the utilities more freely since the amount is already included in the rent. Take time to consider various usage scenarios before arriving at the best price to include for utilities.

    Rental price

    Your rent price may seem higher than other similar listings in the property adverts. If possible, ensure that you include all necessary details in the headline. For example, your headline may say something like ‘rent includes electricity, water and broadband’.

    Tenancy Agreements

    Lay out utilities terms in the Tenancy Agreement. This is to avoid any misunderstanding or disagreement over utilities with your tenant in the future. It’ll be useful to include things like:

    • Who is responsible for managing which utilities (if you’re thinking of sharing the utilities responsibility with your tenant)
    • Which utilities are included in the rent
    • When should utilities payment be made every month?
    • Will there be a late fee if the tenant doesn’t pay you the utilities amount on time?

Option 2: The landlord excludes utilities from the monthly rent

Pros
1. Your financial responsibility and liability is minimised

Gone is the worry of having to remember to pay the utilities on time so that utilities such as electricity, gas and broadband will be uninterrupted.

2. Ability to market your property more competitively

When utilities are not included in the rent, you’re able to put a lower rental amount compared to similar listings with an all-inclusive rent. Lower rental amounts will definitely attract more interest from prospective tenants as that usually signal more savings for them.

3. Utilities costs for you will be predictable

If utilities are included in the monthly rent, the tenant most likely not be as prudent in using them if he were to be making the utilities payments himself. One way you can even out these fluctuations is to let the tenant pay certain utility bill(s) himself.

For example, you may request the tenant pay for the electricity bill himself (since he loves blasting the air-conditioner all day). By dividing the responsibility of managing and paying for various utilities, you the landlord can keep your utilities expenditure predictable and the tenant will learn to conserve energy and resources.

  • things to consider
    Handle Tenant Inquiries

    Even though the tenant is managing and paying for the utilities, he may still enquire about the high cost he’s paying for the utilities. ‘Why is the electricity bill so high? Could it be because the air-conditioner isn’t the energy-saving type?’ ‘The gas cooker seems to be using up a lot of gas. Can you change it a gas-efficient model?’ So you may need to offer satisfactory explanations for such questions, or be prepared to spend some money to get the latest appliance models.

    Tenancy Agreements

    Remember to lay out utilities terms in the Tenancy Agreement. This is to avoid any misunderstanding or disagreement over utilities with your tenant in the future. It’ll be useful to include things like:

    • Who is responsible for managing which utilities (if you’re thinking of sharing the utilities responsibility with your tenant)
    • Which utilities are included in the rent? Which are not?
    • When should utilities payment be made every month?

Option 3: How to set up utilities as a tenant

Monthly utilities bills and installation costs are typically the tenant’s responsibility. The various utilities are managed by different organisations:

  • Water and electricity supply - Singapore Power (SP) Services
  • Piped gas - City Gas
  • Residential telephone land line - Singapore Telecomm
  • Cable TV and/or broadband internet

There are three ways you can apply for an utilities account. You may:

  • Visit a SP customer service centre personally (addresses and opening hours below)
  • Apply online
  • Apply via snail mail
  • Documents

    Here are the important documents you need to bring when applying for a personal utilities account at a SP customer service centre:

    • dentity Card/Passport of property owner OR tenant
    • Proof of occupation of premises OR tenancy agreement
    • Bank account number for GIRO deductions or cash/cheque
  • Locations

    Below are locations of SP Customer service centres you can go to in order to apply for a utilities account:

    
        111 Somerset Road #01-10 (TripleOne Somerset), Singapore 238164
        Mon to Fri: 8am to 6pm | Sat: 8am to 1 pm
        Closed on Sundays and Public Holidays
    
        900 South Woodlands Drive #04-07 Woodlands Civic Centre, Singapore 730900
        Mon to Fri: 8.30am to 5 pm | Sat: 8.30am to 1pm 
        Closed on Sundays and Public Holidays
    
        480 Lorong 6 Toa Payoh #02-08 HDB Hub, Singapore 310480
        Mon to Fri: 8.30am to 5pm | Sat: 8.30am to 1pm
        Closed on Sundays and Public Holidays
                                
  • Cost

    You must pay a deposit for opening an personal utilities account.

    
        HDB 1 or 2 rooms                            $40
        HDB 3, 4, or 5 rooms                        $70
        HUDC / Terrace                              $100
        Private apartments / semi-detached houses   $150
        Bungalow                                    $150
                                

    Charges and tariffs:

    
      Electricity tariffs (wef 1 Jan - 31 Mar 2017)           21.61 cents/kWh (inclu 7% GST)
      Gas tariffs (wef 1 Feb - 31 Apr 2017)                   18.84 cents/unit (inclu 7% GST)
      Water tariff for households                             $1.25 per cubic metre (below 40 cubic metre, inclu 7% GST)
                                                              $1.50 per cubic metre (above 40 cubic metre, inclu 7% GST)
                                

    Below is an illustration on how much your electricity bill can be according to housing type (source: Singapore Power media release Dec 2016).

In conclusion

Whether you’re a landlord or a tenant, there are many things such as utilities management and payment to consider.

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