Why Vacant Cost Recovery is Important

INSIGHTS AND TIPS TO HELP YOU MANAGE UTILITIES BETTER

Why Vacant Cost Recovery is Important

Communities often bill their residents for various utility charges like water, sewer, and trash. However, there are two utilities that residents are typically required to set up in their own name with the local utility provider: electric and gas. What happens when residents don’t set up these services in their own name? And how can you track it?

What is Vacant Theft?

Whether intentional or not, sometimes residents fail to set up these utilities in their name. This is generally referred to as “vacant theft”. When this happens and goes undetected, it can cost an average multifamily community as much as $20,000 annually. Tracking vacant theft is difficult and a huge strain on resources. If you don’t have an accurate and timely way to detect vacant theft, you could be paying countless dollars, that you may never recover. 

 

What is Vacant Recovery?

Vacant recovery is the process of comparing a resident’s move in date to the provider utility bill received in the community’s name for that particular unit, to ensure the resident set up service in their name upon move in. If the resident failed to do so, and vacant theft is detected, the resident is notified and billed for these charges. This prompts the resident to set up service in their name; meaning future invoices for that unit will be sent directly to the resident, and not the community. 

 

Why do I need a Vacant Cost Recovery Program?

 When vacant theft goes undetected, you end up paying for residents' usage, which costs your bottom line. A Vacant Cost Recovery program will minimize or eliminate utility theft, saving you thousands of dollars a year. 

Consider outsourcing this service if you own or manage a community. When outsourced, there is a guarantee that utilities are consistently being monitored for potential vacant theft. Overall, outsourcing helps prevent the property’s Net Operating Income from being harmed by unwarranted expenses. A property can manage utilities on its own, however, there are bandwidth and resource limitations. Outsourcing this service can be beneficial and cost-effective. 

 

How Does it Work?

When utilizing Conservice’s utility expense management platform, invoices are sent directly to Conservice and processed daily. Through seamless resident data integration, we also audit the community’s rent roll daily. Once a vacant unit invoice has been processed for an occupied unit, our system identifies this and automatically prorates the charges based on the residents move in date. The calculated charge is then applied to the resident’s ledger and included on their Conservice bill, along with other utilities the resident is responsible for paying. 

If regulation allows, a Vacant Cost Recovery fee is also assessed to the resident for failing to set up utilities in their name. This incentivizes the resident to quickly put services in their name to avoid additional fees in the future. 

 

The End Result 

By consistently monitoring and accurately identifying vacant theft, you can ensure that residents are setting up the appropriate utilities in their name. And if they don’t, you are no longer eating the cost by paying for their usage.  Conservice effectively tracks all vacant theft through our robust expense management platform, known as Synergy. Contact our team to discuss all the benefits outsourcing utility management has to offer, including vacant theft audits. 

 

3 Benefits of Outsourcing Vacant Theft Recovery 

  1. Recover Lost Funds: By identifying vacant theft and billing residents for their usage, you recover funds that otherwise would have been lost.
  2. Reduce Administrative Burden: As mentioned, communities can manage utilities on their own but there are time, bandwidth, and resource limitations. Outsourcing this service will allow the property to focus on other management areas, providing more efficiency overall.
  3. Gain Visibility into Usage: By accurately identifying vacant theft, you are also able to identify true vacant usage. This data allows for more accurate budgeting throughout the year. 

 

 



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