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Sep 11, 2023 State utility law protects landlords

Gary Sandler

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Published 11 September 2023

New Mexico law protects landlords when tenants don’t pay their utility bills

Utility bills can be a point of contention between landlords and tenants, especially when a tenant vacates a rental property without first settling with the utility companies. The extent to which the problem affects the landlord has everything to do with the individual utility company and the laws and regulations which govern it.

While there are a number of small utility providers in Dona Ana County, the City of Las Cruces and El Paso Electric serve more customers than anyone else. EPE, alone, serves “460,000 retail and wholesale customers in a 10,000 square mile area of the Rio Grande valley in west Texas and southern New Mexico.”, according to its website https://www.epelectric.com/about-el-paso-electric.

During its 2021-2022 fiscal year, the City of Las Cruces Utilities served 41,524 natural gas customers, 36,428 solid waste customers, and dispensed 6 billion gallons of water to 100,000 residents within the Las Cruces city limits and in certain areas of Doña Ana County, according to its annual report.

https://www.lascruces.gov/DocumentCenter/View/9435/LCU-Annual-Report-2021-2022. The rules regarding who is responsible for a tenant’s delinquent utility bill can differ significantly from company-to-company.

“At El Paso Electric the account holder is responsible for the payment”, said George De La Torre, public relations manager for EPE. In other words, the person who opened the account or whose name is on the bill is responsible for payment, period. In the case of a tenant who skips out on an EPE bill, EPE will pursue the tenant, not the landlord.

Las Cruces Utilities follows different policies and regulations, according to Steven Valdez, Utility Billing & Receivable’s Supervisor for the Utilities Department. “When a tenant moves out and leaves behind unpaid utility bills, Las Cruces Utilities (LCU) does everything possible to collect what is owed from the tenant. Then we turn over unpaid bills to a collection agency. But in the end, if the bill remains unpaid, the property owner is responsible for the bill.”

So, how can landlords stay ahead of the game and avoid having a lien placed on their property? “Rental property owners/managers have the ability to be more active in monitoring utility payment status”, said Mr. Valdez. He went on to say that “This can be done by owners/managers requesting tenants provide their city utility account and CID (customer identification) numbers after activation.  Owners/managers can contact the LCU Receivable department to request information regarding account balance and payment history once home ownership/management is confirmed.

In addition, New Mexico Statute 3-23-6 authorizes municipal utilities to pursue owners as well as a method for those owners to absolve themselves of their responsibility for their tenants’ unpaid utility bills. Subsection A of the statute explains that municipalities may pursue and lien landlords for unpaid tenant utility bills. However, subsection C states that Subsection A “shall not apply if an owner notifies the municipality that utility charges that may be incurred by a renter will not be the responsibility of the owner. Such notification shall be given in writing prior to the initiation of the debt and shall include the location of the rental property.”

While having one more account to monitor may seem a bit burdensome, it’s cheap insurance against allowing a tenant to put you in a legally disadvantageous position. Establishing the safeguard is as easy as adding a provision to the lease or rental agreement requiring that the tenant provide their utility account and CID numbers upon activation.

“The important point we want to get out to the rental property community is to contact us when the initial notifications go out to establish a dialog and process towards resolution. LCU files liens on a property as a last resort because some property owners do not respond to our efforts to communicate and resolve”, added Mr. Valdez.

For quick and updated information and answers for day-to-day collections activity, Mr. Valdez suggests that landlords contact the company’s Accounts Receivable Department at 575-541-2111 or receivables@lascruces.gov.

In the end, the rental business is just that, a business. Landlords would be wise to add this layer of protection to their arsenal of legal safeguards.

See you at closing.

Gary Sandler is a full-time Realtor and president of Gary Sandler Inc., Realtors in Las Cruces, New Mexico. He loves to answer questions and can be reached at 575-642-2292 or Gary@GarySandler.com

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