Rental Property Investor · Fairmont, MN · Member since 2019 · 184 posts · 123 votes
Purchased 2 small multifamily buildings in a very small rural town in Southern MN recently. The city is billing us $90 in base fees for every apartment (then in additional also a water usage rate), so 20 unit building we are getting billed $1800 + usage. There is also an assisted living retirement building in the town, the city is billing them only 1 $90 base rate for the entire building (not per apartment). Buildings are setup identical, 1 water meter in the building. We use 50k gallons of water is costs us ~$2000, they use 50k gallons of water they pay ~$200, obviously drastically unfair, (and extremely expensive for us) These are the only apartment type residences in the town.
We have approached the city asking them to change this billing to make it fair/affordable, they declined saying the assisted living building is "grandfathered" in to pay the 1 base fee.
Looking for any guidance for anyone that has dealt with a similar situation before, or if there are any legal precedence we can take. Thanks in advance!
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Well..... the other building is a) grandfathered, b) assisted living, and c) you knew this going in.
I don't see any way (or frankly reason) they are going to change. I suppose you could sue them, but.....? Or go to the city manager/city council and ask for a variance?
Investor · Kent, WA · Member since 2022 · 9 posts · 4 votes
4y
If you sue them you will not win.
Residential assisted living businesses are protected and grandfathered in. This helps the state and seniors save money. We need more RAL buildings and very few people want to run that kind of business.
Purchased 2 small multifamily buildings in a very small rural town in Southern MN recently. The city is billing us $90 in base fees for every apartment (then in additional also a water usage rate), so 20 unit building we are getting billed $1800 + usage. There is also an assisted living retirement building in the town, the city is billing them only 1 $90 base rate for the entire building (not per apartment). Buildings are setup identical, 1 water meter in the building. We use 50k gallons of water is costs us ~$2000, they use 50k gallons of water they pay ~$200, obviously drastically unfair, (and extremely expensive for us) These are the only apartment type residences in the town.
We have approached the city asking them to change this billing to make it fair/affordable, they declined saying the assisted living building is "grandfathered" in to pay the 1 base fee.
Looking for any guidance for anyone that has dealt with a similar situation before, or if there are any legal precedence we can take. Thanks in advance!
Why don’t you attempt to reduce your general water use on property first? Do you have grass and irrigation running?
Second, why don’t you pass the water bills off to the tenants or at least 60-70%. You can have a Common Area fee and Utility charge?
Rental Property Investor · Fairmont, MN · Member since 2019 · 184 posts · 123 votes
4y
@Bruce Woodruff We did go to the city council and they declined to change the pricing.
@Jenny Caldona Do you know what law/statue these buildings are protected under?
@Josh Oaten The $90 are base fees, so not based on our usage. The amount they are charged us for the usage is very small so isn't a factor here at all. Passing the water bill to the tenants, isn't done at all in our area so would hurt our vacancy.
@Bruce Woodruff We did go to the city council and they declined to change the pricing.
@Jenny Caldona Do you know what law/statue these buildings are protected under?
@Josh Oaten The $90 are base fees, so not based on our usage. The amount they are charged us for the usage is very small so isn't a factor here at all. Passing the water bill to the tenants, isn't done at all in our area so would hurt our vacancy.
Thanks for the responses!
Well then you'll have to deal with it I guess. Maybe raise your rates? Or sell and move on, next time good to check this kinda stuff....... :-)