One of the first questions prospective tenants ask is: "What's included?" Your answer directly affects how you price the unit and who applies. Getting utility arrangements right — and documenting them properly — is one of the most practical things you can do as an Ontario landlord.
The Three Basic Arrangements
Most Ontario rentals fall into one of three utility structures:
1. Tenant pays all utilities The tenant sets up their own accounts for electricity, gas, and sometimes water, and pays those bills directly. Your rent is lower to reflect their added costs.
2. Landlord pays all utilities You include everything in the monthly rent. Simpler for the tenant, but you absorb fluctuating costs — especially if tenants are careless with heat or electricity.
3. Split arrangement A common hybrid: the landlord includes water (which is often billed to the property owner by the municipality anyway), and the tenant pays hydro and gas separately.
There's no single "right" approach. It depends on your property type, how it's metered, and what the local market expects.
Electricity (Hydro)
In Ontario, electricity is distributed by local utilities — London Hydro, Hydro One, Erie Thames Powerlines, and others depending on your area. If your unit has its own hydro meter, the tenant can set up their own account and pay directly.
If the unit does not have a separate meter — common in older duplexes, basement apartments, and multi-unit buildings — electricity is likely billed to the property owner. In that case, you have two options:
- Include hydro in rent — simple, but you're exposed to high usage
- Install sub-metering — a licensed sub-metering company installs individual meters per unit; tenants then pay the sub-metering company directly
Ontario's Residential Tenancies Act allows sub-metering in new tenancies, but there are rules around how it's set up and disclosed. If you switch an existing tenant from included hydro to sub-metered, you must reduce the rent by the amount previously attributable to electricity — and the process has specific requirements. Don't try to do this without proper documentation.
Heat
Heating fuel varies across Southwestern Ontario. Many London homes use natural gas (Enbridge), while some older properties in St. Thomas and Sarnia use oil or electric baseboard heaters.
Important: Ontario law requires landlords to maintain a minimum indoor temperature of 20°C from September 1 to June 15. This is not optional — it applies regardless of who pays the heating bill. If you've structured the lease so the tenant pays gas and they can't afford to heat the unit, you're still on the hook if the temperature falls below the legal minimum.
For this reason, many landlords in smaller markets like Sarnia and St. Thomas include heat in the rent, particularly in older buildings where heating costs are hard to predict and usage varies significantly between tenants.
Water and Sewer
Water and sewer in Ontario are almost always billed by the municipality to the property owner — there's typically no mechanism to put the account in a tenant's name. This means water is a cost most landlords absorb and factor into their rent.
That said, tenants can still significantly affect your water bill through excessive use, running toilets, or leaking fixtures. Installing low-flow fixtures and doing annual inspections can reduce water costs noticeably.
Internet and Cable
You are not legally required to provide internet or cable to your tenants. Most tenants set up their own internet service directly with a provider.
If you do offer internet as an included amenity (common in furnished units or rent-by-the-room setups), make sure the lease clearly states what is included and that you reserve the right to change providers if needed.
How to Document Utilities in Your Lease
Ontario's standard lease form (Form No. 2229E) includes a section specifically for utilities — which are included, which the tenant pays, and the details of any sub-metering or separate billing arrangements. Fill this out clearly and completely.
Ambiguity in the lease about utilities is a common source of disputes. "Heat included" should specify what type of heat. "Tenant pays hydro" should include account setup instructions.
Keep a copy of any utility account numbers, provider contact details, and transfer records in your property file.
Pricing Your Rent Based on What's Included
If you're trying to figure out whether to bundle utilities or not, run the numbers both ways. In London, for example, a unit renting at $1,500 with everything included might rent at $1,200–1,300 all-utilities-out, depending on the expected hydro and gas costs.
When utilities are included, tenants are often willing to pay a premium — and vacancy periods can be shorter because the all-in price is easy to budget. The tradeoff is exposure to usage variability and utility rate increases.
A property manager like Prospera Properties can help you model utility costs based on the property type and help you set a rent that protects your margins while staying competitive in the local market.
A Few Practical Tips
- Read the meter at move-in and move-out — document readings with photos and include them in your move-in/move-out inspection report
- Know who to call for emergencies — keep the contact number for the local gas company and hydro provider in your records; tenants may not know who to call if there's an outage or gas smell
- Inform tenants about utility providers upfront — if they need to set up their own accounts, give them the provider name and a timeline; delays in account setup can create billing confusion
Getting your utility structure right at the start of a tenancy saves a lot of confusion — and potential disputes — down the road.