Picture this.
You’re a landlord in Virginia. It’s been months since one of your previous tenants moved out, taking their furniture, pots and pans, bedding and other possessions with them.
It’s been a while, but now you are notified there’s an unpaid utility bill leftover from the old tenant. They have not paid it despite multiple, varying collection attempts — now, it’s your responsibility to pay it.
Under the Code of Virginia, landlords can end up paying the price for irresponsible tenants who do not pay their water, sewer or public utility bill.
It’s a practice allowed by state code as a last resort to recoup money owed for utilities. It can result in a lien being placed against a property owner if they don’t pay their tenant’s bill.
Both the city of Williamsburg and James City Service Authority, which provide water to Williamsburg and much of James City County, respectively, use the allowances under state code to recoup unpaid bills.
“The central question to be answered is who should pay when the tenant does not,” Andrew Trivette, city manager for Williamsburg, wrote in an email. “If no one is held accountable then the rate payers absorb the loss in the form of increased rates.”
The issue was brought up recently during public comment periods at Williamsburg City Council’s June work session and regular monthly meeting for June.
The public speaker, a landlord in the area, indicated he believed it was unfair for landlords to pay the penalty for unpaid bills.
“It is important to note that we have not utilized this authority on any property in the City,” Trivette wrote in an email.
Trivette also confirmed the city has not placed any lien for outstanding utility bills against the property owned by the landlord who spoke in front of City Council.
James City Service Authority Director Doug Powell confirmed James City County also follows state code and uses “all reasonable efforts as described in the State Code to collect delinquent balances.”
How it works
Public utilities are self-supporting bodies that generate their own revenue and pay their own expenses. They do not rely on city or county budgets for financial support.
Before a lien is ever placed against a property owner for an unpaid utility bill, there are other hoops bill collectors must first jump through.
Trivette said Williamsburg’s Utility Division will often collect a deposit for new service. Those deposits can range from $0 to $500, depending on whether the account is residential, business, or a business that will use a lot of water such as a car wash, according to an online application for water service.
When the city’s utility division has an outstanding tenant bill, they will first try to recoup the money through the customer’s deposit.
If that deposit doesn’t cover the outstanding bill, the city can use the debt set-off program through the Virginia Department of Taxation, which will take delinquent debts out of Virginia Individual Income Tax refunds.
If that doesn’t work, the city can sue the tenant.
If those three options don’t work, that’s when the utility will go to the landlord looking for payment.
Trivette said a landlord can rightfully collect a security deposit from a tenant to satisfy claims for unpaid bills, if necessary.
Limitations and protections
State code “limits and empowers” the city utility’s ability to collect unpaid bills, Trivette said.
The city must allow water billing to be set up in a tenant’s name, if that’s what the tenant desires and the landlord approves.
The city can turn off water for unpaid bills, similar to electric companies such as Dominion Energy.
Lastly, the city cannot refuse to connect water service for a new tenant at the same property if there’s an outstanding bill from the previous tenant.
The Virginia Legal Aid Society has compiled information on how public utility customers are protected under state regulations. The packet includes information on bill assistance, paying late bills and more.
Possibility for change?
City Council directed staff to look into the policy after the landlord inquired about the issue during the council meetings.
Mayor Paul Freiling said directive doesn’t necessarily mean change is on the way, as state code governs the water bill issue.
Any decision or change would need to comply with provisions set out by state code.
Trivette said he has already informally briefed City Council on the process for collecting unpaid bills. He also planned to respond directly to the landlord who spoke at the meeting, which is a “normal course of action” for similar inquiries.
“Impacts of the decision must be considered and in this case we are talking about a public utility that is required to generate revenues for its operation,” Trivette said.
Correction: A previous version of this article said the city cannot shut off water service, but it does little to motivate payment when a tenant’s lease is up, Trivette said.
