Demystifying the deposits and expenses you pay for your rental

However, most utility companies require bond amounts to be equal to anywhere between 1-3 times the service location’s average monthly bill. Additionally, each state’s public service commission is able to dictate the maximum amount utility companies can require for security deposits. Many things affect how much you need to deposit for electricity.

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This blog explores what utility deposit bonds are, their significance, and why they matter in securing essential utility services. Utility deposits are the fees paid to the utility company to initiate services at an address, not the fees paid to build infrastructure to an address like hookup fees. Utility deposits are most often less than $100 per utility — often much cheaper — and are even sometimes covered by the property owner. If a rental is advertised as “utilities included,” you probably won’t have to pay utility deposits directly to the utility company.

What Can Your Customers Do to Avoid Claims Against a Utility Deposit Bond?

• Typically, bonds are required for business customers who have never had an account before and plan to run up large utility bills.
• It usually depends on things like your credit score and payment history.
• How much an electricity deposit costs varies as several factors influence the required payment.
• If the principal does not pay their utility bill for an extended amount of time, the obligee has the right to seek compensation equal to the unpaid bill from the surety.

We issue utility deposit bonds in all 50 states, and our online application takes just minutes to complete. Our team works fast to get you a quote in about 24 hours, after which you only need to pay the premium to activate the bond. Feel free to contact us any time if you have questions about anything. Or explore this resource all about surety bonds to learn everything you need to know about the bonding process. When an individual or business applies for a utility deposit bond, the surety bond company assesses the applicant’s financial stability and creditworthiness. Upon approval, the bond is issued to the utility service provider, assuring them of financial protection in case of non-payment or default.

Utility Bond Basics

Prepaid electricity plans are becoming popular because they are flexible and can help save money, especially for renters. Unlike regular plans that need deposits and check credit history, prepaid plans let you pay as you go. This means you don’t have to make big payments upfront or worry about your credit history. It protects the power provider from unexpected costs that will affect other customers in their service. By requiring a deposit, the company can ensure they have the funds to cover any unpaid balances. How you pay for energy depends on your plan type and arrangements with your energy provider.

• Because hookup fees often involve connection with utilities that are either raised or buried, hookup fees can be quite costly.
• This is because hookup fees only occur at the time of construction or if a utility is added or updated in the area.
• To get back your utility deposit, paying on time is critical.
• If you handle your payments wisely, you will get this money back.
• If enough bills went unpaid, it could put the utility company and the essential service it provides in jeopardy.

In a utility bond agreement, the person seeking utilities is the principal, and the utility company is the obligee. If the principal does not pay their utility bill for an extended amount of time, the utility deposits obligee has the right to seek compensation equal to the unpaid bill from the surety. The surety will compensate the obligee for the unpaid bill, but then the principal (who left the bill unpaid in the first place) must pay the surety back.

Things to Know About Hook Up Fees

This makes the electricity provider feel safe and they may ask for a lower deposit. The company you choose also matters for the deposit amount, including your natural gas bill. Each company has its own way of calculating this, including authorized payment locations.

The amount should not be more than the price to restore the keys. If you return the keys when you move out, you will be entitled to receive your full key deposit back. He is the sole author of all the materials on AccountingCoach.com. You might find help that can make it easier for you to access important services.

On average, electricity deposits come to about 20% of your estimated yearly power bill or the total of the estimated electricity bills for 2 consecutive months. Along with your apartment security deposit, it’s essential to keep track of any utility deposits. In Texas, like in much of the country, the power company requires an electricity deposit before you get electric service if you’re a new customer. This requisite protects the energy provider and other consumers from those who use electricity and then leave without paying.

Choose Surety Bond Connection as your trusted partner, and experience the ease of securing utility services without the financial burden of upfront deposits. Yes, if you have kept a good payment history for 12 straight months and have paid your final bill fully, your Texas electricity provider will return the security deposit. You pay for your energy in advance, so providers don’t ask for a large upfront payment. This makes them easier for everyone, no matter their credit history. Utility companies use it to see how responsible you are with payments. If your score is high, it shows that you pay your bills on time.

Options to lower or eliminate deposit requirements include negotiating with utility providers, proving eligibility for waivers, or choosing prepaid electricity plans. If your service is disconnected for non-payment, any refund due must be paid 30 days after disconnection. The utility company should give a check to refund deposits unless you request a credit to your account. However, if your refund amount does not exceed 125% of your average monthly bill, the utility may issue the refund by a credit to your account.

Once you are ready to start your electricity account, it is important to have the right documents. Getting these documents ready in advance can help make things faster and easier. Most utility companies need proof of your identity to confirm your details.

Moving?

Usually, the provider will use your deposit, plus any interest, to pay off your final bill. If you are moving within the same area and keeping the same provider, you can often transfer your deposit to your new address. In some cases, you might not have to pay a security deposit at all. Utility companies and the Public Utility Commission have programs to help people who are having money troubles or have special situations.

Basically, a surety bond protects one party from the misbehavior of another. The “victim” in that scenario has a way to seek damages, and the “perpetrator” is held accountable for their actions. The surety agrees to pay the obligee, but they don’t accept financial liability. When you vacate the property, your deposit will be returned together with any accrued interest. However, if there are any repairs needed to be done for damages you have caused during your occupancy, the charges will be deducted from your deposit.