This is a public service announcement for all of our investment property owners. Managing utility services effectively is important for both you and your tenants. One important utility management strategy is setting up “Revert to Owner” agreements for electric and natural gas utilities.
In this article, we’ll explore what “Revert to Owner” means, why it’s beneficial, and how you can set it up for your rental properties.
Understanding “Revert to Owner”
“Revert to Owner” is a utility billing arrangement commonly used in rental properties. In this setup, the utility bills for electric and natural gas services are initially in the landlord’s name (property owner) but can be temporarily transferred to the tenant’s name during their occupancy. However, when the tenant vacates the property, the responsibility for these utility bills reverts back to the landlord automatically.
The primary goal of this arrangement is to ensure that the rental property remains continuously connected to essential utilities without the risk of service disruptions due to tenant turnover.
Benefits of “Revert to Owner”
When “Revert to Owner” is set up with a utility, here is what happens…
When a renter calls the utility company and asks for the electric or gas service to be turned off, the utility will automatically be switched to your name (the owner) so that there’s no interruption in service.
Think about that. Your renter is moving out in December and you’re on a skiing trip with your family. You don’t want to sit on the phone with the electric utility company while you’re on vacation, making sure the utilities don’t get shut off when the current renter moves out.
Even worse, if your power or gas are shut off in the heat of the summer or the cold of the winter, you might have thousands of dollars in damages due to freezing pipes or mold depending on the time of year.
All you have to do to get this set up is fill out a form with your utility company.
Setting up “Revert to Owner”
We used to keep a list of utility companies and their contact information. The challenge is that this information is changing all the time, so keeping those documents up to date becomes almost impossible. For example, there is no longer a “KCP&L” electric utility. KCP&L became Evergy.
If you don’t know who the electric utility and natural gas utility is for your investment property, we recommend you start with Google to research utilities in your area. (This is sometimes the case with out-of-town investors… often, the owners that live in town know which utility to call.)
If you own an investment property and you don’t have “Revert to Owner” set up with the utilities, we recommend that you get that set up as soon as possible!