How to Discourage Electricity Theft by Tenants
One way tenants may steal electricity is by stealing from the building supply. Tenants may tamper with wiring and hook up directly to your building's metered electricity supply. A tenant who does this taps into power that you're paying for. Another way to steal electricity is directly from other tenants. In this case, a tenant may tap into a neighboring tenant's metered electricity supply. While this type of tampering may not happen often at your building, it can cause big problems when it does. And your lease may not give you the legal backing you need to evict the tenant, says New York attorney Peter Schwartz.
One course of action is to add a clause to your lease giving you the right to take strong action, including eviction, against tenants who tamper with utilities. It's important to bar tampering with all utilities, not just electricity, since tenants might also try to steal other utilities, such as water. You can adapt and use our Model Lease Language: Bar Tenants from Tampering with Utilities, to help you prevent this type of theft.
You can add this clause to any leases you sign with tenants of unregulated apartments and to vacancy leases you sign with rent-stabilized tenants. But you can't add this clause to renewal leases you sign with rent-stabilized tenants or to leases you've already signed with rent-controlled tenants.
Problems Caused When Tenants Steal Electricity
If tenants steal electricity, you'll get stuck dealing with some big problems. For example:
Criminal violations. If a tenant tampers with electrical lines, the Department of Buildings (DOB) can take you to criminal court. You could be accused of violating Section 27-3017 of the city's Administrative Code for allowing electrical work to be done by an unlicensed person. The possible fine ranges from $500 to $5,000.
Fire hazards. Tampering with electrical lines can create a fire hazard.
Increased expenses. If a tenant steals electricity from your building, your expenses will increase, since you will be paying for that electricity. If a tenant steals from another tenant, the victimized tenant could sue you for negligence, claiming that you knew or should have known about the problem and that you did nothing to stop it. A court may decide that you must reimburse the tenant for the difference in the electric bills.
When to Suspect Utilities Tampering
To help you discover if tenants are tampering with electricity or other utilities, inspect an apartment's utilities and service whenever there's a vacancy. And inspect building-wide utilities monthly.
For example, check for wires around the electrical meter area that were not there the last time you looked. Also look out for the following signs that someone is siphoning electricity:
Sudden dramatic increase in your electric bill;
Loss of power or service for unexplained reasons;
Flickering lights; or
Circuit breakers tripping for no apparent reason.
Use Lease Clause Banning All Utility Tampering
Most leases ban illegal actions by tenants. Since stealing electricity is against the law, you probably think you can evict a tenant who siphons off your or another tenant's electricity. But it may be more difficult than you think. The stealing tenant may simply claim that he or she didn't install this electrical wiring. And a court may accept this argument.
The best way to avoid a problem like this is to put a clause in your lease banning tenants from tampering with any utility or service, including electrical wiring, recommends Schwartz.
The lease clause should cover all possible utilities and everything tenants could possibly do to tamper with them or steal them. Our Model Lease Language says tenants can't change, alter, or interfere with the mechanical, electrical, sanitary, or other service systems of the building and apartment.
“You never know what tenants might decide to tamper with,” warns Schwartz. For example, they may bring a dryer into the apartment and create their own ventilation system, he says.
The clause should also specify that it applies to tenants who actually tamper with the utilities themselves and tenants who just permit it. Some tenants may claim they didn't do the work themselves. This is how tenants avoided eviction in a case involving stolen electricity for their air conditioner.
Also, the clause should state that tampering with the utilities is a “default” under your lease and can lead to the tenant's eviction. This will allow you to evict a tenant who tampers with utilities if, like many leases, yours has a paragraph elsewhere saying that tenants “in default” can be evicted. Your attorney can help you make the necessary revisions to our Model Lease Language if your lease doesn't specifically use the term “default.”
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