Under Section 40 of the Residential Tenancies Act 1986, tenants are responsible for outgoings related to their use of the property — but shared utilities that serve multiple tenancies fall to the landlord. This split causes more confusion than most renters expect, especially in apartment buildings with common meters or multi-unit properties where the bill doesn’t neatly match one flat’s usage.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
What I tend to notice is that tenants and landlords alike assume the default rule covers every situation. It doesn’t. The way your tenancy agreement is worded — specifically the shared utilities clause — decides who pays for what, who gets cut off when a bill goes unpaid, and what happens when the arrangement breaks down. A poorly written clause can leave one tenant covering the entire building’s hot water or a landlord facing a Tenancy Tribunal claim for unlawful disconnection. If you’re unsure about your broader protections, it’s worth reading up on tenant rights in NZ before you sign anything.
Here’s what you actually need to know.
The shared utilities clause is the part of your tenancy agreement that lists each utility and assigns responsibility. In a flat with one electricity meter and two flats, the clause should say who pays for the common meter. In a house with a gas bottle, it should say who pays the hire charge and who pays for gas used. If it doesn’t, the default rules under the RTA apply — but those defaults leave gaps. Before you move in, running through essential questions to ask when renting an apartment in NZ can catch utility arrangements that aren’t spelled out.
Who Pays What? The Actual Cost Split Under NZ Law
The table below covers the standard split under the Residential Tenancies Act and typical practice. But the real cost picture depends on how the property is set up — and that’s where many tenants get caught out.
→ Scroll right to see all columns
| Utility or Charge | Tenant Pays | Landlord Pays |
|---|---|---|
| Electricity (individual meter) | Yes | No |
| Electricity (shared meter) | No | Yes |
| Gas used | Yes | No |
| Gas bottle hire / cylinder | No | Yes |
| Water rates | No | Yes |
| Water usage (individually metered) | If stated in agreement | If not stated |
| Internet / phone | Yes (if connected) | No |
| Council rates | No | Yes |
| Building insurance | No | Yes |
In older apartment buildings with a single electricity meter serving multiple units, the landlord pays the power bill and recovers costs through rent. In newer builds with individual meters, each tenant pays their own usage. The difference can be hundreds of dollars a year depending on whether the hot water cylinder serves one flat or the whole block. Water rates are another sticking point. Under the RTA, the landlord pays water and wastewater charges unless the property has individual meters and the tenancy agreement clearly says the tenant pays for water used. If there’s a shared outdoor tap or a common garden irrigation system, the landlord covers that portion even with individual meters.
Gas bottle properties add their own layer. The landlord pays the hire charge for the cylinder and the connecting pipework. The tenant pays for the gas they actually use. A full bottle at move-in is common, but the agreement should state whether the tenant must leave a full bottle at the end or pay for what they used. If you’re unsure how a specific utility arrangement should be documented, getting a quick legal opinion on real estate law can save you from a costly dispute later. Also check how the setup affects your security deposit refund rules — utility arrears can sometimes be deducted from the bond.
Three Mistakes That Cost Tenants and Landlords Real Money
Treating a Shared Meter as a 50/50 Split Between Flats
When two flats share one electricity meter, some tenants agree to split the bill evenly. That works until one flat uses triple the power. Under the RTA, the landlord must pay for utilities shared by different tenancies. Tenants who agree to split a shared bill among themselves have no legal recourse if one flat stops paying — the arrangement isn’t covered by the tenancy agreement. The better approach is to require individual meters or have the landlord include utilities in the rent. If that’s not possible, the tenancy agreement should state a clear formula — per person, per flat, or based on a ratio — so the RTA’s default rule doesn’t override the arrangement.
Threatening or Attempting Disconnection
A landlord who turns off the power or water to pressure a tenant into paying rent is committing unlawful disconnection. The Residential Tenancies Act prohibits landlords from interfering with service supply except in cases of immediate danger or necessary repairs. Only the utility company has the legal right to disconnect for non-payment. The Tenancy Tribunal can order compensation for alternative accommodation costs, spoiled food, and other losses resulting from the disconnection. It can also award damages for harassment. If you’re facing a dispute over utility payments or an unlawful disconnection, a specialist can advise on your options — landlord-tenant law advice is worth considering before the situation escalates.
Leaving the Utilities Clause Vague or Verbal
A verbal agreement to split the internet bill or share the power cost is not enforceable in a Tenancy Tribunal dispute. The tenancy agreement must state in writing who pays each utility. Without it, the default RTA rules apply, which may not match what the parties intended. Landlords and tenants should review the utilities clause before signing and make sure it covers every service connected to the property — including any shared systems like central heating, common-area lighting, or water pumps in rural properties.
Setting Up a Shared Utilities Clause That Actually Works
Write Every Utility Into the Agreement
Start by listing every service connected to the property: electricity, gas, water, internet, phone, and any shared systems like central heating or common-area lighting. For each one, state whether the tenant or the landlord pays. If the cost is shared between multiple flats, specify how the split works and who handles the bill. Under Section 45B of the RTA, the landlord must also permit and facilitate fibre broadband installation if the tenant requests it — this obligation belongs in the utilities clause. Landlords managing multi-unit properties should consider business law advice on compliance to ensure their agreements meet current requirements.
Metering and Billing — How the System Determines Who Pays
Individual meters make things simple: the utility company bills the tenant directly, and no shared cost calculation is needed. Shared meters create complexity. If the landlord pays the shared bill, the tenancy agreement should state whether the cost is included in the rent or charged separately. If the landlord charges separately, the agreement needs a clear formula — per person, per flat, or based on a ratio. The key principle is that the tenant only pays for what they actually use or what the agreement clearly specifies. Any ambiguous phrasing will likely be interpreted in favour of the tenant if a dispute reaches the Tenancy Tribunal.
Dispute Resolution Step by Step
When a utility dispute arises — a billing error, an unlawful disconnection, or a disagreement over who pays — the process follows a set path. Trying to bypass these steps usually makes things worse.
- 1Contact the Utility ProviderStart by calling the customer service number on the bill. Request a meter re-read or equipment test. Many billing errors are resolved at this stage without involving the landlord or the tribunal.
- 2Take It to the Complaints CommissionerIf the utility provider doesn’t resolve the issue, take the complaint to the Electricity and Gas Complaints Commissioner — or your local council for water disputes. They can investigate and order corrections.
- 3Document EverythingKeep photos, receipts, copies of bills, and records of all communications. This evidence is critical if the dispute reaches the Tenancy Tribunal, especially for claims involving unlawful disconnection or compensation for losses.
- 4Apply to the Tenancy TribunalFor unresolved disputes, unlawful disconnection, or breach of the tenancy agreement, apply to the Tenancy Tribunal immediately. Delays can affect compensation claims. The tribunal can award costs, order service restoration, and penalise landlords for serious breaches.
Future-Proofing: Healthy Homes and Utility Compliance
From 2025, all private rentals in New Zealand must meet the Healthy Homes standards. These standards cover heating, insulation, ventilation, moisture control, and draught stopping. The heating requirement means the property must have a fixed heater that meets minimum output for the living room size. The insulation standard affects whether the property can maintain adequate temperature without excessive energy use. Landlords must include a Healthy Homes compliance statement in new tenancy agreements. Failure to comply can result in financial penalties through the Tenancy Tribunal. If you’re dealing with ongoing repair issues tied to utility systems — like a faulty hot water cylinder or inadequate heating — knowing how to handle lease damage repairs in NZ can help you separate routine maintenance from compliance obligations.
Frequently Asked Questions About Shared Utilities in NZ Rentals
Can a landlord include utilities in the rent and charge a flat rate? ▾
What happens if one flatmate doesn’t pay their share of the power bill? ▾
Is it legal for a landlord to install a coin-operated meter in a boarding house? ▾
Who pays for the gas bottle refill at the end of a tenancy? ▾
Can a landlord charge a separate fee for water if there are individual meters? ▾
The Shared Utilities Clause Is Worth Reading Before You Sign
The shared utilities clause might be a few lines in a longer agreement, but it decides who pays when the bill arrives and who has legal recourse when something goes wrong. Reading it carefully before signing — and making sure it matches the actual setup of the property — prevents disputes that can cost both parties time and money. The RTA provides the legal framework, but the clause is what makes it work for your situation. A few minutes of checking now can save thousands in unexpected charges or tribunal claims later.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read The Benefits of Month-to-Month Rentals in NZ.
Sources and Further Reading
Tenant Rights in NZ: What Landlords Don’t Want You to Know — A broader look at NZ tenancy protections, including bond disputes, entry rules, and what landlords must disclose before you sign.
Essential Questions to Ask When Renting an Apartment in NZ — A full pre-tenancy checklist covering utility arrangements, maintenance history, and hidden costs that aren’t in the advertised rent.
Tenancy Services NZ (n.d.). Utilities and other payments. 🔗
New Zealand Government (1986). Residential Tenancies Act 1986. 🔗
Property Plus NZ (2025). The new rental agreement: your rights and obligations in 2026. 🔗
Find a Lawyer NZ (n.d.). Utilities disputes. 🔗
Tenancy Services NZ (n.d.). Healthy Homes standards. 🔗
