Give tenants an incentive to conserve energy | Bedford Hills NY Real Estate

Q: I am an apartment owner in a major metropolitan area and have a question regarding heaters. I currently have leases with all 10 tenants in my building where I pay gas and they pay electricity. All the units have gas wall heaters. I recently conducted my annual inspection of the units and realized that the large majority of the tenants left their heaters on during the day (most likely because they are not paying the bill), which obviously runs my bill up. Can I switch the gas heaters out with new electric heaters (in which the tenants would pay for their heat because they pay for their electricity)?

A: This is an excellent question. You have hit on an important topic that many landlords and property managers often overlook. Any time you can make the tenant responsible for the costs of operating your rental property, you give them an incentive to conserve.

This was true back in the 1970s when many residential rental properties were converted to individual electric meters, just as it is true with the recent trend towards individually submetering water. With your situation, you could possibly convert from a master-metered natural gas meter to individual gas meters and then have the tenants become responsible for their own natural gas usage.

This would be the best way, as it would cover not only the gas for space heating but also the gas used for cooking and heating the water, particularly if you have individual hot water heaters for each unit.