Electrcity Charges - Granny Flat

Hey guys and girls,

I just thought i would put the situation out there for feedback and opinions. The situation goes, its a residential property with a detached garage with a granny flat on top. Both tenanted with separate metering for each occupancy, for explainations sake lets call tenant A the house and tenant B the granny flat.

Built like this from a few years back, and have not had any issues until now. The new tenants in the granny flat have raised the issue that they are being charged for usage that they are not responsible for in the garage, which is occupied by the tenant A.

Tenant B claim that they have been absent from the property for 2 weeks, with no electricals left on, and have recorded there was a leap of 50kw/hr in their metering in those 2 weeks and have calculated based on a peak rate of 50c per kw/hr, equating to around $12.5 a week. With logic they claim that so in a month their usage is up to $50 extra and are seeking a rent reduction of $15 a week to compensate.

Speaking to tenant A whom have occupied the premise since 2012, they admit that they frequently use the garage as a workshop to work on their car, and have agreed to run an extension lead from the main house out to garage to avoid using tenant B electricity.

The PM has also explained that tenant A pays for water usage for both premises since the water meter could not be divided, is this not sufficient as tenant B doesnt pay for water usage?

Being an existing, detached building and so a rewire of the electrical not financially plausible, what can be possible permanent solutions so that both tenants can live happily ever after until the end of tenant B lease. Also they have mentioned breaking the lease if nothing is done about it and that they are not compensated for the existing charges, should I be worried?
 
Preferably Rewire to isolate both properties.

You will be in a heap of bother if the overcharged tenant goes to the tribunal.

At the very least, have an electrician deactivate the power points in the garage that are charged to tenant B to FORCE tenant A to use his own power.

And yes, tenant B is entitled to compensation for overpaying electricity charges.
Marg
 
The resolution will have to be that you compensate tenant B for the period of usage in question. Then have tenant A use their extension in the future as agreed already.

That would be the easiest and best method to resolve the issue.

Also technically tenant A isn't required to pay any water usage because the properties are not separately metered.

You would need to have a separate meter for the granny flat, so that you can deduct the difference to charge each tenant their usage correctly.
 
Do what marg said, isolate the power to both dwellings or disconnect. It a couple of hours work for a sparky at worst.
 
Tenant A has been there for years and we've never had any issues.
They've been good and looked after the place, and their proportion of the rent is much greater, whereas Tenant B has only been there for over a month of their 12 month lease. It would be less of a loss, if they break the lease in my opinion
 
Why do you want them to leave? The problem is the way you have the services set up. It's an easy job for a sparky to sort out, do it.
 
Tenant A has been there for years and we've never had any issues.
They've been good and looked after the place, and their proportion of the rent is much greater, whereas Tenant B has only been there for over a month of their 12 month lease. It would be less of a loss, if they break the lease in my opinion

Possibly tenant A is well aware that their electricity costs are being subsidised
Marg
 
The other option is to rent the premises to include electricity.
Obviously increase the rent to compensate.
 
Why do you want them to leave? The problem is the way you have the services set up. It's an easy job for a sparky to sort out, do it.
I just figured it was less hassle, especially if they're trying to threaten breaking their lease for a response on the matter.

Possibly tenant A is well aware that their electricity costs are being subsidised
Marg
What do you mean marg?
That they are aware so have been taking advantage of the situation?

The other option is to rent the premises to include electricity.
Obviously increase the rent to compensate.
Will take that into consideration, next time around I suppose.
 
Just an idea, but even though tenant A and tenant B have separate meters.
Can tenant B refuse to pay for electricity as they aren't actually separately metered?
 
Just an idea, but even though tenant A and tenant B have separate meters.
Can tenant B refuse to pay for electricity as they aren't actually separately metered?

From what I can see is that they are separately metered so the connection would have to be in their name so they would have to pay.

Because an agreement has been reached with the other tenant to not use the garage electricity, then that is the best option now.

Disconnecting the power in the garage isn't necessary at least until there is a new tenant B or if the simple resolution doesn't work out.
 
Just an idea, but even though tenant A and tenant B have separate meters.
Can tenant B refuse to pay for electricity as they aren't actually separately metered?

They can't refuse to pay the electricity supplier as the account is in their name.

As Marg has already mentioned if they take you to the tribunal Tenant B would, in all likelyhood, be awarded all their electricity costs back from you. They could even go for more costs such as moving costs phone connection charges etc all related to moving out.

Tread carefully as you have created a nightmare all in the hope of saving a few bucks in not setting the GF up properly.
 
I just figured it was less hassle, especially if they're trying to threaten breaking their lease for a response on the matter.
/QUOTE]

I dont blame them, i would be ******** too. Why should they be paying for something they are not using? Would you?
 
They can't refuse to pay the electricity supplier as the account is in their name.

As Marg has already mentioned if they take you to the tribunal Tenant B would, in all likelyhood, be awarded all their electricity costs back from you. They could even go for more costs such as moving costs phone connection charges etc all related to moving out.

Tread carefully as you have created a nightmare all in the hope of saving a few bucks in not setting the GF up properly.
Thats great then, because the electricity is in their name and is their account, thus their responsibility.

I dont blame them, i would be ******** too. Why should they be paying for something they are not using? Would you?

If I was in their shoes, of course. My wildest imaginations cant seem to work out what goes where the asterisks are, any clues?

Yes they can unless the account is in their name.
Marg
Should I be concerned if they were to disconnect their electricity/cancel their account?
 
Thats great then, because the electricity is in their name and is their account, thus their responsibility.

Maybe you should read the rest of my comment rather than just see what you want to see and understand.

I will requote for your edification

As Marg has already mentioned if they take you to the tribunal Tenant B would, in all likelyhood, be awarded all their electricity costs back from you. They could even go for more costs such as moving costs phone connection charges etc all related to moving out.

Tread carefully as you have created a nightmare all in the hope of saving a few bucks in not setting the GF up properly.
If they win at a tribunal you will be forced to pay them all their electricity cost regardsless of whose electricity account it is.
 
They would have things on in the background, so would not take their calc as gospel, but at the same time, I would want the garage to not be on my meter at all, nor anything anyone else could use without asking.

On the flip side, you could ask them to swallow it, because if they force the issue, you would also have to split water, which means they owe somebody for that.

I would suggest fixing the wiring in good time, not emergency rush job & get an agreed amount from them for water, which you could pass onto the tenant paying the bill while all is happy & split that too at some time.
 
Something tells me this property isn't a legal dual occupancy... but I digress.

The PM has also explained that tenant A pays for water usage for both premises since the water meter could not be divided, is this not sufficient as tenant B doesnt pay for water usage?

No, you cannot charge ANY water usage to any tenant let alone ALL of the water usage to Tenant A in a multi tenancy property unless you separate the water meters, separate the hot water systems (if you haven't already) and have the property certified as water efficient by a plumber. If you can't do this for any reason then you cannot charge any of your tenants a cent for water usage.

Being an existing, detached building and so a rewire of the electrical not financially plausible, what can be possible permanent solutions so that both tenants can live happily ever after until the end of tenant B lease. Also they have mentioned breaking the lease if nothing is done about it and that they are not compensated for the existing charges, should I be worried?

You don't need to rewire the whole property (unless there's more incorrect wiring) and it surely won't cost that much money to properly fix your garage power - dig a trench from the house to the garage and have a sparky run new power from the correct meter board to the garage.

Unlike someone mentioned above, I wouldn't be taking my sweet time with this - the longer it drags on, the bigger your bill will be if either tenant takes you to tribunal. At least if you resolve it now then your exposed timeframe stops as of the date of resolution. You're already up for compensation of Tenant A's water usage charges to date at a minimum.

I'm not at all a fan of including water or power in the lease - what happens if one of your tenants runs up a big bill... it becomes your problem to pay it. If you go to the trouble of properly separating the services then you avoid bill shock and if/when you decide to sell the property, if another investor takes a look it'll be more enticing for them as they won't have to muck about with this kind of rubbish.

The only way you could get away with leaving the property alone would be to wire the power back as just one service and then lease the whole property to Tenant A and allow them to sublet upstairs to Tenant B. Then it would be up to Tenants A and B to negotiate electricity and water at their convenience. But even if you were to go down this path you'd still be liable for the unfair charges to date.

Though I haven't dealt with the tribunal for matters like this, I would imagine they're likely to be more lenient to you if you were to make good all of these issues rather than either doing nothing or relying on tenants to make their own agreements which can backfire and leave you in a big mess.
 
It is not an emergency job, no matter how you look at it & the problem already exists, let's face it, the worst is to be up for all costs to date, it is a new tenant.

If they take reasonable steps to fix this, that is all that is reqd, think there is consensus on this part....
 
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