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Tenant Payment of Shared Utilities

by Mel Metts

Under Illinois law, a tenant cannot be required to pay for shared utilities (used by other tenants or for common areas), unless the following requirements are met:

1. Landlord provides tenant with a written disclosure prior to leasing or acceptance of a security deposit.

2. Landlord provides tenant with copies of utility bills for prior twelve months. Can be waived in writing.

3. Tenant is not asked or required to collect utility payments from other tenants.

4. Any rent concession offered in exchange for tenant's payment of shared utilities must be in writing.

The penalties for violation of the law may be in an amount up to 100% of the utility payments made by the tenant, plus damages assessed by the court.

The applicable text of the Rental Property Utility Service Act is provided below:

(765 ILCS 735/1.2) (from Ch. 80, par. 62.2)

Sec. 1.2. Certain tenant-paid utility payment arrangements prohibited; Notice of change in payment arrangement.

(a) No landlord shall rent or cause to be rented any unit in which the tenant is responsible by agreement, implication, or otherwise for direct payment for utility service to the utility company and in which the utility company billing for that service includes any service to common areas of the building or other units or areas used or occupied by persons other than the individual tenant and those occupying the unit with the tenant on the utility account, unless, before offering an initial lease or a renewal lease, accepting a security deposit, or otherwise entering into an agreement with the prospective tenant to let the premises:

(1) The landlord provides the prospective tenant with a written statement setting forth the specific areas of the building and any appurtenances that are served by the meter that will be in the tenant's name and the nature of the utility uses of those areas, including any that have not been reflected in past utility company billings but that may arise (such as the rental of a neighboring unit that has been vacant, the installation of washers and driers in the basement, or the use of the garage for mechanics);

(2) The landlord provides the prospective tenant with copies of the utility bills for the unit for the previous 12 months, unless waived by the tenant in writing;

(3) The landlord neither suggests nor requires the tenant to collect any money for utility bills from neighboring tenants whose utility usage will be reflected in the prospective tenant's utility company billings; and

(4) The landlord sets forth in writing the amount of the proposed rent reduction, if any, that is offered to compensate for the tenant's payments for utility usage outside of the tenant's unit.

(b) No landlord shall request or cause to be effected a change (i) from landlord-paid master metered utilities to tenant-paid individually metered utilities or (ii) from landlord-paid to tenant-paid utilities, regardless of the metering arrangement, during the term of a lease. The landlord shall provide a minimum of 30 days notice to each affected tenant before effecting such a change in service; for tenants under a lease, the notice shall be provided to the tenants no less than 30 days before the expiration of the lease term. This subsection does not prohibit the landlord and tenant from agreeing to amend the lease to effect such a change; the amendment must be in writing and subscribed by both parties.

(c) Any term or condition in a rental agreement between the landlord and the tenant that is inconsistent with this Section is void and unenforceable.

(d) Nothing in this Section affects the relationship between a utility company and its customers.

(Source: P.A. 87-178.)

(765 ILCS 735/1.3) (from Ch. 80, par. 62.3)

Sec. 1.3. Tenant remedies and burdens of proof.

(a) A residential tenant shall be entitled to recover damages from the landlord for the utility bills rendered in the tenant's name as a result of the landlord's violation of this Act and which the landlord has not paid to the utility company. The tenant shall have the burden of establishing that the tenant was billed for utility service as a result of the landlord's violation of this Act. Upon proof by the tenant that the tenant was billed an amount for service not attributable to the unit or premises occupied by the tenant, the landlord shall be liable to the tenant for 100% of those utility bills. However, this sum shall be reduced by whatever percentage of use that the court finds that the landlord has established to have been attributable to the unit or premises the tenant occupied during the period that the violation continued. The tenant may recover these damages by an action at law or by a counterclaim in any action brought by the landlord against the tenant. The court may treble the damage award when the court finds that the landlord's violation of this Act was knowing or intentional. The tenant may also recover costs and fees, including attorneys fees, if the amount awarded by the court for utility service is in excess of $3,000. The remedies contained in this Act do not limit or supersede any remedies the tenant may have under a lease, contract, or the laws, including the common law, of this State.

(b) This Section shall be prospective in application; the remedies shall not attach to any violation that occurred before July 1, 1992.

(c) Nothing in this Section affects the relationship between a utility company and its customers.

(Source: P.A. 87-178; 87-895.)