Explanation of Utilities (gas, water, electricity)

The term 'utilities' stands for services consumed such as gas, water, and electricity. The cost of utilities may or may not be included in the monthly rental amount. If the cost is included in the monthly rental you will not be required to pay any extra cost towards these services. You will have to pay for the utilities separately if it is not included in the monthly rent. This information will be contained in your leasing agreement.
HomeNew to USAExplanation of Utilities (gas, water, electricity)
Explanation of Utilities (gas, water, electricity)

Large Apartment Communities

This arrangement is pretty straightforward if you are living in an apartment community where everyone gets a separate bill for utilities. In such cases, your lease agreement will explicitly contain information on terms & conditions for payment of rent and utilities. Usually you will get a separate bill for water and electricity for your unit. You can make a payment online or by check. It is convenient to pay online if there is no added service fee.

The landlord usually pays for the common area utilities. This includes the lighting in the garage, lift, yard lights, pathways in the complex, and other common areas. This also includes the cost of water used for lawn sprinkler.

Small Communities/Shared Homes/Duplex Homes

The arrangement becomes a bit complicated if the landlord and tenant live on different floors (as in case of a duplex) and there is only one meter. At the time of signing the agreement it must be clear whether the landlord will pay for a one metered complex or the tenant will share half of the total bill.  The bill for common areas must be paid by the landlord, unless otherwise agreed upon.

Sometimes, landlords add some conditions to the rental agreement:

  • Fixed monthly bill for utilities is to be paid by tenant.
  • Thermostat must be set no higher than a certain temperature in winter.
  • If bill is very high the landlord can increase the utilities bill payable by the tenant.


It is up to the landlord and tenant to work out an arrangement on the utilities bill. There is generally a conflict of interest if the bill is to be divided among three or more residents. If the bill is reasonable, there will be no conflict at all. However, if the bill is very high people will start pointing fingers at each other. It is usual to hear people saying that they have to pay for high water bills as their neighbor takes long showers or perhaps has a leaky toilet. Conflict can be avoided completely if the landlord and tenant have a clear cut understanding about the rental and utilities bill.


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