Detroit Property Management Insights: What Is a Water Affidavit?

With all the expenses that go into managing properties, some investors may be concerned about their ROI. However, one of the biggest challenges with operating successful rental properties is keeping the income and expenses to maximize your profits.

One thing that can hamper a landlord's business is when tenants don't pay for their utilities in a timely manner or they don't pay them at all. If they move out and leave behind a bill, it can pose a real problem for property owners.

Our Detroit property management team is here to help you avoid this problem. At Own It Detroit, we use a water affidavit to help protect your business. Let's take a look at how it works.

What is a Water Affidavit?

A water affidavit is a document the tenant signed and notarized by the Detroit Water and Sewerage Department. This document consists of a statement showing that the person residing on the property is leasing it and is not the property owner.

In addition, the water affidavit document states that the tenant will take on full responsibility for the water and sewage bills during their time living at the stated address. The document will include the property address, tenant's name, meter number, lease expiration date, landlord's information, and tenant's signature. Finally, the document must be notarized before it's complete.

Like any other affidavit, a water affidavit is a legally binding document once notarized.

How Does a Water Affidavit Work?

When a tenant moves into your property, they will be required to fill out the water affidavit mentioned above. This document can be obtained from the water department and filled out where a notary is present.

Next, the tenant returns the water affidavit to the Detroit Water and Sewerage Department, and the administrator will assign a water account number to the tenant. This account number will not be the same number as what is assigned to you as the property's owner.

Rental property owners receive a different water account number from the tenant. So, landlords know what to do with utilities when tenants move out. They will simply start paying for all the utilities when the lease expires, and the tenant moves out.

Remember, the water affidavit has a lease expiration date. If the tenant decides to renew their lease, you and the tenant will need a new water affidavit for the next lease term. You may want to have that ready to go to facilitate the process.

Are Water Affidavits Common?

Water affidavits are not commonly used in other states in the U.S. However, the city of Detroit offers these affidavits, making it convenient for landlords to keep expenses separate. 

What Are the Benefits of Having a Water Affidavit for Property Owners?

If you're an investor landlord, you'll find a water affidavit beneficial for various reasons. Property owners are protected from tenants who don't pay their water bills.

Suppose a tenant is delinquent on the water bill. In that case, the affidavit makes them responsible for the costs and other damages. For example, if the amount goes into collection, it's taken on the person who signed the water affidavit (not the property owner).

In addition, sometimes, a water company will take action, such as putting a lien on a property if the water bill isn't paid. However, when a tenant has signed and notarized a water affidavit, the water department can't put a lien on the property if the bill goes unpaid.

Water Affidavits for Single-Family and Multi-Family Properties

In many cases, landlords of single-family properties require tenants to pay for all the utilities. This included electricity, gas, and water. Therefore, the property owner won't be burdened with these bills, and these expenses won't cut into their ROI.

However, multi-family property owners usually do things differently. For example, landlords will often take responsibility for such bills as gas, common area lights, and sometimes water. 

Suppose the landlord does pay some of these utilities. In that case, they will probably want to consider that when setting the rent. The rent will likely be higher to compensate for the added expenses. Professional property management in Detroit, MI, can guide you in setting the rent at an appropriate rate.

Management Water Affidavits With the Best Property Management Company Detroit Offers

Working with our Detroit property management team can help you get everything in order when it comes to your properties, including managing utilities and billing. Own It Detroit guides property owners through each step of the process of setting up the water affidavit.

Our experts can also handle your other property management tasks, such as lease issues, tenant screenings, maintenance requests, inspections, customer service, accounting, rental collection, and much more. To learn more about our property management services, reach out to our seasoned real estate investment experts!

Find the property manager you need with insights in our free resource, the "Guide to Finding the Best Property Management Company in Detroit!"