ADU in Los Angeles area - how to split utility bills?

ADU in Los Angeles area - how to split utility bills?

Member since 2020 · 10 posts · 0 votes

I'm having an ADU built from a detached garage which will be a 2/1, approx. 750 sf. The single family house is a 3/2 approx. 1200 sf.
The utilities are LADWP and gas, both properties would be on the same shared meters. 

Would love to get suggestions from those of you in the LA area on what would be the best way to split the utility bills?

Thanks~

0Reply
131 views

Most Popular Reply

Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
5y
Originally posted by @Michael Schnyder:

@Matthew Forrest That's what my contractor suggested to split the bill approx. 60/40. My concern would be if lets say the ADU which would be paying 40% leaves the water running and the bill drastically goes up from one billing cycle to the next. The front house then says they didn't use the increased amount and shouldn't have to pay so much more.
What do I do in that case?  If could also because an issue with the house and ADU tenants, right?  

 We have multiple properties with a shared water meter that has each unit paying based on a percent of the bill that we disclose at initial lease. 

We occasionally get a complaint about it not being fair.  It usually only happens once because we basically give the same response 1) it is what was agreed to in their lease 2) their lease is up at so-and-so date and they are free to find other housing at that time.  

We have been fair for items that are not in the tenants’ control such as extra water costs associated with slab leaks, etc.  Under those rare conditions, we charge the tenant based on their historical consumption and we pick up the overage and consider it just another of the miscellaneous expenses that are so often left out of pro formas (our pro formas have a miscellaneous expense for rare items like this). 

good luck

See this reply in the discussion

14 Replies

Jump to latestLatest
  • Joe HomsBusiness Member
    Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
    5y

    @Michael Schnyder are you able to do a submeter in that area?

    Good Investing...

  • Realtor · Los Angeles, CA · Member since 2018 · 952 posts · 1k+ votes
    5y
    Originally posted by @Michael Schnyder:

    I'm having an ADU built from a detached garage which will be a 2/1, approx. 750 sf. The single family house is a 3/2 approx. 1200 sf.
    The utilities are LADWP and gas, both properties would be on the same shared meters. 

    Would love to get suggestions from those of you in the LA area on what would be the best way to split the utility bills?

    Thanks~

    Michael,

    I looked into splitting the water bill on my LA duplex and got no love from the submetering companies. I don't think they want to deal with such small accounts.

    One silver lining for you, though: if you're paying your tenant's gas bill, you're entitled to raise the rent an extra 1% per year. That'll add up!

    Best,

    Jon

  • Rental Property Investor · Torrance, CA · Member since 2016 · 263 posts · 132 votes
    5y

    @Michael Schnyder I like splitting utilities by unit square-footage. From what I have seen its roughly proportional to consumption.

  • Member since 2020 · 10 posts · 0 votes
    5y

    @Matthew Forrest That's what my contractor suggested to split the bill approx. 60/40. My concern would be if lets say the ADU which would be paying 40% leaves the water running and the bill drastically goes up from one billing cycle to the next. The front house then says they didn't use the increased amount and shouldn't have to pay so much more.
    What do I do in that case?  If could also because an issue with the house and ADU tenants, right?  

  • Member since 2020 · 10 posts · 0 votes
    5y

    @Joe Homs from what I understand, if I have separate meters installed, it would be $30K.  Would a submeter be something different?  

  • Member since 2020 · 10 posts · 0 votes
    5y

    @Jon Schwartz thanks for the reply, but the gas is not rely my concern, it's primarily the water bill that I would be concerned about.  

  • Joe HomsBusiness Member
    Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
    5y

    @Michael Schnyder yes they are two different things.  If you are able to split the water flow going into each building then you should be able to place a submeter at both locations.  This would tell you how much each tenant is using and you can deduct that from the main water bill.  The remainder would probably be landscaping water usage and laundry room usage?

  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    5y
    Originally posted by @Jon Schwartz:
    Originally posted by @Michael Schnyder:

    I'm having an ADU built from a detached garage which will be a 2/1, approx. 750 sf. The single family house is a 3/2 approx. 1200 sf.
    The utilities are LADWP and gas, both properties would be on the same shared meters. 

    Would love to get suggestions from those of you in the LA area on what would be the best way to split the utility bills?

    Thanks~

    Michael,

    I looked into splitting the water bill on my LA duplex and got no love from the submetering companies. I don't think they want to deal with such small accounts.

    One silver lining for you, though: if you're paying your tenant's gas bill, you're entitled to raise the rent an extra 1% per year. That'll add up!

    Best,

    Jon

     >One silver lining for you, though: if you're paying your tenant's gas bill, you're entitled to raise the rent an extra 1% per year. That'll add up!

    Can you post a reference?   I have read the CA rent control bill (AB1482) multiple times and have not seen this.  It seems to be clear that the percent increase is on all things currently included in the rent payment. 

    Maybe you are referring to a local Los Angeles Rent Control legislation.

    Thanks

  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    5y
    Originally posted by @Michael Schnyder:

    @Matthew Forrest That's what my contractor suggested to split the bill approx. 60/40. My concern would be if lets say the ADU which would be paying 40% leaves the water running and the bill drastically goes up from one billing cycle to the next. The front house then says they didn't use the increased amount and shouldn't have to pay so much more.
    What do I do in that case?  If could also because an issue with the house and ADU tenants, right?  

     We have multiple properties with a shared water meter that has each unit paying based on a percent of the bill that we disclose at initial lease. 

    We occasionally get a complaint about it not being fair.  It usually only happens once because we basically give the same response 1) it is what was agreed to in their lease 2) their lease is up at so-and-so date and they are free to find other housing at that time.  

    We have been fair for items that are not in the tenants’ control such as extra water costs associated with slab leaks, etc.  Under those rare conditions, we charge the tenant based on their historical consumption and we pick up the overage and consider it just another of the miscellaneous expenses that are so often left out of pro formas (our pro formas have a miscellaneous expense for rare items like this). 

    good luck

  • Realtor · Los Angeles, CA · Member since 2018 · 952 posts · 1k+ votes
    5y
    Originally posted by @Dan H.:
    Originally posted by @Jon Schwartz:
    Originally posted by @Michael Schnyder:

    I'm having an ADU built from a detached garage which will be a 2/1, approx. 750 sf. The single family house is a 3/2 approx. 1200 sf.
    The utilities are LADWP and gas, both properties would be on the same shared meters. 

    Would love to get suggestions from those of you in the LA area on what would be the best way to split the utility bills?

    Thanks~

    Michael,

    I looked into splitting the water bill on my LA duplex and got no love from the submetering companies. I don't think they want to deal with such small accounts.

    One silver lining for you, though: if you're paying your tenant's gas bill, you're entitled to raise the rent an extra 1% per year. That'll add up!

    Best,

    Jon

     >One silver lining for you, though: if you're paying your tenant's gas bill, you're entitled to raise the rent an extra 1% per year. That'll add up!

    Can you post a reference?   I have read the CA rent control bill (AB1482) multiple times and have not seen this.  It seems to be clear that the percent increase is on all things currently included in the rent payment. 

    Maybe you are referring to a local Los Angeles Rent Control legislation.

    Thanks

     Yes, it's LA RSO.

    Here's a reference: http://hcidladev.lacity.org/rs...

    Click the little red arrow next to "Rent increases that do not require HCIDLA approval."

  • Investor · Los Angeles, CA · Member since 2014 · 122 posts · 35 votes
    5y

    @Michael Schnyder

    You can have your plumber add the sub-meter. LADWP would never do it. I called and asked them why and the girl was honest with me and said they just don’t want to deal with the hassle of splitting bills.

    What I do is I take a picture of my sub-meter every month and calculate the gallons used when I get my bill from DWP.

    Def more exact and I’m not giving away money to my tenant by paying more that I’m suppose too.

    Hope this helps.

  • Member since 2020 · 10 posts · 0 votes
    5y
    Thanks, how much was the sub-meter to install?

    Originally posted by @Jamie Garcia:

    @Michael Schnyder

    You can have your plumber add the sub-meter. LADWP would never do it. I called and asked them why and the girl was honest with me and said they just don’t want to deal with the hassle of splitting bills.

    What I do is I take a picture of my sub-meter every month and calculate the gallons used when I get my bill from DWP.

    Def more exact and I’m not giving away money to my tenant by paying more that I’m suppose too.

    Hope this helps.

  • Member since 2021 · 2 posts · 0 votes
    5y

    @Jamie Garcia can you help understand further how you calculate bill? I had a submeter installed and trying to understand how to calculate before my tenant moves in.   When do you take picture of submeter? Does LADWP provide directions? Any advise would be great?

  • Member since 2021 · 2 posts · 0 votes
    5y

    @Joe Homs question i just built an adu and had my contractor install a water submeter for the unit. However, is there a program or system that can help me calculate or track usage to coincide with bulling cycle? 

Join the conversationCreate a free account to reply, vote on answers and follow this thread.