Receiving a complaint of any nature from a resident is something we all work to avoid. As with any complaint, how we respond can mean the difference between a successful resolution and serious legal issues.
Lawmakers and governing agencies continually scrutinize utility billing practices to ensure residents are being billed within established regulations and consumer protection practices are being followed. Initial resident inquiries to property management can escalate to a formal complaint when property management rushes to respond, fails to respond, fails to conduct proper research, or fails to provide a resolution.
Effectively Managing a Utility Billing Complaint
When notified of a formal complaint, don’t panic. Most complaints originate from a resident not receiving a response from property management. A resident may have reached out with concern that billing statements seem high. This concern can simply be the result of the resident not understanding what they are being charged, how they are charged, or even the possibility of a leak. In an effort to get clarification and resolution they contact property management. When residents do not receive a complete response or any response at all, they begin to look at their options, one of which is filing a complaint with a regulatory agency.
Make sure your onsite team understands the lease agreement and is well-trained on how residents are billed for utilities and how to manage utility billing complaints. If you use a third-party billing company, notify them of the resident concerns or formal complaint. They can assist in providing additional and more detailed explanations of the issue. If the onsite team is unable to answer the resident’s questions on the spot let, let them know their concern will need to be researched and someone will get back to them.
Checklist for Your Onsite Team
- RECEIVE: Ensure the proper party timely receives a copy of the complaint notice.
- RESEARCH: Be diligent in your research of the issue and make sure you obtain evidence to support your findings.
- RESPOND: Respond to the entire complaint within the allotted time.
- RESOLVE: If action needs to be taken on your end, complete prior to submission of response and indicate action taken within the response.
Utilities Subject to Complaints
Resident complaints cover all utilities and are derived from submetered or allocated bills and the same for associated fees. Water and sewer are the most commonly billed utility by owners which increases the potential for water/sewer complaints. The most common utility complaints are outlined below.
Water/Sewer
- High Usage
- Leaks
- Estimated Consumption
- Erroneous Charges
- Improper maintenance
Electric/Gas
- High Usage
- Estimated Consumption
- Erroneous Charges
Associated fees
- Unreasonable Amount
- Missing/Incorrect Lease Language
- Impermissible Fees
Compliance is Key
All it takes is one resident to identify a questionable billing practice and file with your local regulatory agency to set off a firestorm. Changes in legislation, or the creation of new regulations, are generally brought on by illegitimate practices uncovered by consumer complaints. If the regulatory agency determines the owner was charging fees outside of compliance, they may require all such fees be refunded to all residents. Agencies make decisions based on the practice as a whole, not just the tenant filing the complaint. Agencies will not just say credit Jane Doe, they will say credit everyone that was billed out of compliance based on Jane Doe’s complaint.
A quick snapshot from the Public Utility Commission of Texas (PUCT) shows 9,104 new complaints in 2024. Of those, 6,841 are related to electric and 1,346 to water. In a press release from September 10, 2024, the PUCT reported that it has secured $393,576 electric refunds and credits and $89,272 in water credits on behalf of consumers.
Minimize Billing Complaints
The best way to manage resident complaints is to minimize them by continually auditing your program for errors or illegal practices, assessing risks, taking action to correct errors, and consistently communicating with your residents.
Find out more about maintaining a successful and compliant utility billing program with Minol by contacting a multifamily industry expert.