Renters and Water Bills: Submetering, Allocated Billing (RUBS), and Your Rights

Four ways renters pay for water

Before you sign a lease, find out how water is billed. It can change your monthly cost more than you might expect.

• Included in rent: the landlord pays the utility and you pay nothing separate.
• Direct account: you have your own meter and your own account with the utility, like a homeowner.
• Submetered: the building has one master meter from the utility, plus a private meter for each unit. The landlord or a billing company bills you based on your submeter.
• Allocated: there is no meter for your unit. The landlord divides the building’s bill using a formula. This is often called RUBS, short for ratio utility billing system.

How allocated billing (RUBS) works

With allocation, your share depends on a formula, not on your own use. Common formulas use the number of people in each unit, the unit’s square footage, or a mix. A tenant who uses little water can pay the same as a neighbor who uses a lot.

Texas rules show how this can be regulated. The Public Utility Commission of Texas requires owners using allocation to first subtract a share for common areas, such as irrigation, pools, and laundry rooms. The rest is then allocated using an approved method, such as the number of occupants, an occupancy factor based on bedrooms, or a mix of occupancy and square footage. Ask your landlord which formula is used and what common-area share is deducted.

What the bill should show

A third-party water bill should make clear who is billing you and why. In Texas, a submetered or allocated bill must say that the service is submetered or allocated, show the total amount due, name the utility that provides the water, and state that the bill is not from that utility. It must also name the firm that prepared the bill and give a phone number and address for questions. The due date may not be less than 16 days after the bill is mailed or hand-delivered.

If your bill doesn’t explain how the amount was calculated, ask. You are paying for a service, and you have a right to understand the charge.

Your right to see the records

In Texas, tenants can ask to inspect the records behind their water bills. These include the utility’s bills to the owner, the rate structure, submeter readings and tests, and the calculation formulas. If the records are kept at the on-site manager’s office, the owner must make them available within three days of a written request. If not, the owner has 15 days to get copies to the on-site manager. If there is no on-site manager, the owner has 30 days to provide copies at your unit. Owners must keep the records for the current year and the previous calendar year.

California has a similar rule for submetered buildings. Under the state’s submetering law, SB 7, the landlord must provide certain information in writing within seven days of a tenant’s request. This includes the date the submeter was last tested and verified.

Fees landlords may and may not charge

Both states limit extra charges. In Texas, owners may not pass on the utility’s deposit, disconnection, reconnection, or late-payment fees to tenants. Tenants can’t be charged for the base charges of vacant units. A service charge for submetered water is generally limited to 9 percent of the tenant’s submetered charge, with some exceptions. A one-time late penalty of up to 5 percent is allowed only if the tenant agreed to it in writing.

California’s law has a similar ban on passing through the landlord’s deposit, disconnection, reconnection, and late fees. It caps the landlord’s billing fee at the lesser of $4.75, adjusted over time, or 25 percent of the amount billed. It also limits late fees, starting at up to $7 for a first late bill.

Disclosures before you sign

In California, a landlord who plans to bill separately for submetered water must give the tenant written disclosures before the lease is signed. They include an estimate of the monthly water bill, the due dates and payment procedures, the only charges the bill may include, and how to contact the landlord about billing. The landlord must also explain that it has to investigate and, if necessary, repair reported leaks within 21 days, or the water bill will be adjusted.

Even where no law requires it, ask before signing. Ask how water is billed, what an average monthly charge has been, who to call about leaks, and how disputes are handled. Get the answers in writing or in the lease.

Disputing a water bill from your landlord

Put your question in writing and keep a copy. Point to the specific charge, the period, and why you think it is wrong. Ask for the records behind it.

In Texas, when a tenant disputes a bill, the owner must investigate and report the results in writing within 30 days of the tenant’s written notice. Report leaks in your unit promptly and in writing. A running toilet or dripping faucet can raise a submetered bill, and many leases put repairs on the landlord.

If the landlord doesn’t pay the water bill

If the water account is in the landlord’s name and they fall behind, the utility may send a shut-off notice to the building. Several places protect tenants from losing water because of a landlord’s debt.

In Los Angeles, LADWP says that under California law, a tenant whose landlord is behind on the account can apply to become a customer without paying the landlord’s past-due balance. The tenant may need to establish credit and pay a deposit. California’s State Water Board says tenants in individually metered homes must be notified in writing of this right. California’s SB 7 also says a landlord may not shut off or interfere with a tenant’s water for any reason, including nonpayment of a water bill, except to make repairs, replace equipment, or do other maintenance. Philadelphia says it will not shut off a tenant’s water for the landlord’s nonpayment.

Wherever you live, call the utility as soon as you see a notice. Tell them you are a tenant, give the address, and ask what protections apply. Keep your lease and rent receipts ready to prove you live there.

Questions to ask your landlord or property manager

Use this list before you sign, or when a water charge looks wrong.

• Is water billed by submeter, by allocation, or included in rent?
• If allocated, what formula is used, and what share is deducted for common areas?
• Who reads and tests the submeters, and when were they last tested?
• What has the average monthly water charge been for this unit?
• What fees are added, and are they allowed under state rules?
• How do I report a leak, and how fast is it fixed?
• How do I dispute a charge, and how long does a review take?