Has WE Energies Ever Tried To Hold You Responsible for An Ex-Tenant's Utility Bill?

Fellow blogger and AASEW Board member, Tim Ballering, runs a very informative blog for landlords entitled "Just A Landlord." Tim has graciously allowed me to reproduce one of his most popular posts on the topic of what a landlord can do when WE Energies attempts to hold the landlord responsible for an ex-tenant's utility bill.

Please be sure and check out Tim's blog - there is some great stuff there.

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What the law is and how to deal with WE Energies.

A couple of years ago a bunch of owners came to me all with a similar problems. They had properties with separate utilities, yet WE Energies was attempting to collect utility bills from them that should not have been the owners' responsibility.

If only they knew the rules they would have less headaches. So I wrote a lengthy email on the subject and posted it on the ApartmentAssoc at YahooGroups.com email list. Out of my frustration with email formating this became the first post on this site back in February 2008.

This problem seemed to have diminished for a while, but judging from owners I have spoken to recently it is back... with vengeance. But if you know the rules and follow them you will never have to pay for a utility bill that is not yours.

The updated version of the original post on WE Energies billing practices:

Some days there seems to be no limit to attempts to cheat rental property owners out of their hard earned money. Tenants, City Hall and WE Energies all seem to stay awake nights figuring how to get your last few bucks.

In the past month, October 2009, many owners have again asked ‘What is my responsibility to pay for separately metered utilities when the tenant moves or doesn’t place the account in their name?’ and then go on to tell their tale of woe, describing how WE Energies is attempting to extract money from them for utilities they do not believe they owe.

One tells of having the electric at his own home disconnected over what should have been a tenant's bill. Another talks of how WE Energies has placed thousands of dollars in bills from a separately metered four family into her name. She feels that this will cause her to lose the building. Another talks of how these improper WE Energies bills has cost him 160 points on his credit report, going from excellent to very poor.

So where do we begin? This is a fairly complex area. Here is my attempt at a simplified overview. Remembering you should hire an attorney when you need one, and even when you think you don’t need one if there is a lot of money involved.

Let’s start with the applicable law, Wisconsin Statute §196.643 Owner responsibility for service to rental dwelling unit.

(1) Responsible party. When a customer terminates service to the customer's rental dwelling unit, a public utility shall make reasonable attempt to identify the party responsible for service to the rental dwelling unit after the customer's termination. If a responsible party cannot be identified, the public utility may give the owner written notice by regular or other mail of the public utility's intent to hold the owner responsible for service to the rental dwelling unit. The owner shall not be responsible for service if the public utility does not give the notice under this subsection or if, within 15 days after the date the notice is mailed, the owner notifies the public utility of the name of the party responsible for service to the rental dwelling unit or notifies the public utility that service to the rental dwelling unit should be terminated and affirms that service termination will not endanger human health or life or cause damage to property.

Seems pretty simple. In order to place a utility bill in your name the public utility, WE Energies in this case, MUST attempt to find out who is responsible for the service. If they can’t determine who is responsible and they want to place the account in your name they MUST send the property owner a letter AFTER the tenant’s termination of service date. That letter MUST give you 15 days to respond. Your response can be 1) you want the account in your name; 2) you can provide the public utility with the name of the party responsible for the bill; or 3) you can ask the utility to simply turn off the service. Do nothing within the 15 days and the bill is placed in your name.

Here’s some areas where WE Energies cuts corners and attempts to put bills in your name improperly:

• The 15-day letter is the trigger for billing an owner. Prior to sending the letter, however, “public utility shall make reasonable attempt to identify the party responsible for service to the rental dwelling unit after the customer's termination.” and only after the public utility can’t determine who is responsible may they send the letter.
• WE Energies typically sends the letter without first making any independent attempt to identify the responsible party. Therefor the letter is invalid for putting the bill in your name.
• WE Energies often sends the letter prior to the termination date of the tenant. The statute requires the process to begin "after the customer's termination." Here again this makes the letter invalid for putting the bill in your name. How can an owner determine if the power should be turned off or provide the name of the responsible party prior to the the current tenant leaving? You can’t. Many times the vacating tenant doesn’t leave on the date they should. Some holdover for a day, a week, a month or they simply change their mind about moving. Maybe the roomate who has the power in their name is moving and the other roommate is staying. Other times the letter comes more than 15 days prior to the current tenant’s termination date but by the time they do move you have a new tenant.
• WE Energies often calls you, rather than sending the letter, expecting an instant answer when you haven’t had ample time to assess the situation. You may not even know the tenant is vacating. A call is not a letter.Think about it in terms of our responsibility to send a deposit transmittal letter.. ‘but your Honor, I called them and told them I was keeping the deposit so I didn’t need to send the required letter.’ The same standard applies here.Remember no proper 15-day letter- no legitimate bill, even if they called.
• WE Energies sends you a bill a month, a year or more after the fact without ever sending the letter, expecting you to pay for utilities used prior to you receiving any notice from WE Energies. There can be no proper owner billing prior to the date the letter was sent to you.
• Another area WE Energies attempts to trick property owners into paying bills that are not theirs is by placing the bill in your personal name and attaching that bill to your home account while the property is owned by an LLC or other entity.The law only permits the bill to be placed in the name of the property owner.
• The WE reps will often tell you that they can’t place the bill to your new tenant unless you provide personal information on the tenant including their Social Security number. While you must provide their name and there is probably no problem providing their prior address, third party disclosure of credit information such as the tenant’s Social Security number is a violation of the federal Fair Credit and Collections Act. Penalties for FCRA violations are severe. WE Energies’ attorneys will admit they cannot require you to provide this information.
• Additionally WE Energies attempts to make it difficult for you to turn off the service by demanding that you meet the WE Energies service person who will arrive at the property between ‘8AM and noon’ on a Tuesday. While the Public Service Commission does require the public utility to assure that the unit is empty prior to disconnect, there is no requirement that you have to waste half a day to meet them.

However there are a couple of instances where you have to get the checkbook out and pay, even if it should not have been your bill.

• If WE Energies first attempted to identify the responsible party AFTER the termination date and then WE Energies sent the letter to the property owner, but you ignored it there is no defense to the bill.
• If your property does not have separate utilities. Let's say you have a single meter in a duplex and you want both tenants to pay half. You can do that if it is written into your rental agreement, but the bill MUST be in your name per Wisconsin Statute §196.643(2)

An area of disagreement is the definition of responsible party when the tenant vacates before the last day they are legally responsible for the unit.

• Many rental agreements hold the tenant contractually obligated to provide heat to the property until the last day they are liable for rent. That would appear to make the vacating tenant the responsible party until the last day they are legally liable for the unit. WE Energies take the position that the occupant’s responsibility ends the day they said they moved out, even if that date is weeks before their month to month tenancy would terminate or months before their yearly lease terminates.