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Landlords in McCleary hold risk if tenants refuse to pay utilities

Landlords in McCleary who have tenants that leave large, unpaid bills will continue to be responsible for those bills, McCleary City Council members determined last week.

That’s just the cost of doing business between landlords and tenants, city officials said. Sometimes a property will make a landlord money. Sometimes it won’t. It’s a business decision for the landlord to rent his or her property.

The issue came up after Public Works Director Todd Baun said that numerous landlords had contacted the city in recent months complaining.

“They have a tenant that wants to move into their property that is for rent,” Baun explained. “They require their normal deposits and allow them to move in. We just had a landlord quote a cost of $1,600 in just normal deposits before a renter can move into the property.”

The city utilities include not just water and sewer, but the power bills, too.

The city used to accept utility deposits. That way, the landlord could apply the deposit toward the outstanding bill. But the city stopped that practice in August of 2011 over questions of co-mingling money in the different utility accounts.

“We now have an application that the tenant and landlord fill out stating the landlord is responsible to collect any and all deposits, including utility deposits, at their discretion,” Baun said. “Now, since we no longer take the utility deposits, renters are leaving large, outstanding bills for the landlord to take care of. We have landlords that will be going to collections because their renters have left outstanding utility bills. We also have landlords that are leaving their utilities off and not renting their properties because of this issue.”

Realtor Helen Lake said that at one point, tenants would leave their utility bills unpaid and then go find another house to rent and get their utilities turned there under their same name and the city would allow it.

But not anymore, says Clerk-Treasurer Wendy Collins, who notes the city upgraded its software and can flag people with outstanding debt, even if they’re at different addresses. The trouble comes when the landlord pays off the debt. City Attorney Dan Glenn recommended that the city keep track of those with a bad credit history and not give them an account, noting the city is allowed to consider credit history in determining who gets an account with the city.

The issue that is happening now, Baun explained, is that people are coming in using a different name on the account — a boyfriend, parent or grandparent — “and then leaving another large utility bill for that landlord.”

Collins says that the landlord is getting a copy of every bill and should consistently know if the bill is paid.

“We’ve been back and forth, back and forth and I think we ought to just let the policy sit,” said Councilman Bennie Ator.

“It all comes down to me is who is going to take the loss? And the landlord is in the business to make money,” added Councilman Jeff Catterlin. “The city is not in a position to take a loss.”