Did you just close on a pre-construction condo or townhome? Congratulations—you’re officially a real estate investor! But here’s a question I get all the time from new landlords: “Who pays for utilities?” The short answer? You do—at least at first. But with the right lease setup, you can quickly shift those costs to your tenant. Here’s how it works.

What Utilities Are You Responsible For?

As a condition of closing your pre-construction property, you, the landlord, are responsible for setting up all utility accounts. This includes:

Electricity (Hydro) - this is usually the only utility for condos
Gas (if applicable)
Water and garbage collection (more common in townhomes or freehold homes)

Even if your condo fees cover some building services, any utilities that are metered seperately must be put in your name at closing.

Pro Tip: Don’t Forget to Transfer Ownership

Utilities won’t magically switch into the tenant’s name when they move in. It’s on you or your property management company to make sure:

The lease clearly states the tenant is responsible for utilities and which ones (specifically list them out)
You follow up to ensure accounts are transferred after the tenant takes possession with the utility providers

Failing to do this could leave you paying for hydro, water, and heat months into the lease.

Watch Out for Rental Guarantee Programs

If you purchased a unit with a rental guarantee from the builder many investors don’t realize that you are likely on the hook for all utilities for the entire length of the rental guarantee program—usually 24 months. Even if there’s a tenant in place, some contracts explicitly state that landlords cover the utility bills. That’s why you must read the fine print of your rental guarantee agreement.

Why This Matters for Cash Flow

Utilities can range from $50–$200/mo for condos and $400-$700/mo for townhomes, depending on the unit and location. Over 12 months, that could be over $8,000—a major dent in your ROI if you didn’t plan for it.

Want to see how it affects your bottom line? Use my Cash Flow Calculator to model your real income and expenses, including utilities.

In Summary

Managing utilities is one of the easiest ways to take control of your cash flow—but it’s also one of the most commonly overlooked. If you’ve just closed, here’s your checklist: