Common Area Utilities

4 Replies

I have a 2 unit building with 2 HVAC systems and tenants pay electric and gas.  How do I pull out the utilities for the common areas (basement, garage, staircase/entry) so I, as the landlord can pay those?

@Sara Byerly Just to clarify, does each unit have its own gas and electrical meter? If so, the heat for example, figure out which units heater is supplying the heat to your common areas. You can then do a ratio based reimbursement every month to that units tenant. For example, maybe figure out how much common area sq footage there is, compare that to combined sq footage of the common area and their unit (find what that percentage is), then tell them that you reimburse XX% of their gas bill (assuming that the heater is the only gas appliance). Personally, I don’t have any direct heat to my common area in my duplex. There are two gas heaters for each unit. I rely on the residual heat from the units to warm the common area. Realistically, no one should be hanging in the common area and there are no water lines so keeping it comfortable at your expense seems like a waste of money to me. For electricity, assuming there are two meters, figure out which one is supplying the common areas. The ratio thing doesn’t really work here but you can look into submetering the meter that is supplying the common area. Just a random thought, I’m not sure of your specific situation but say your common area has two lights both of which are fed from the unit 1 breaker box (2 dIfferent circuits). You could move one of the circuits to the unit 2 breaker box and then just charge each tenant the full price by saying that both units share the cost of the common area since they are the ones using it after all. I feel like this idea would be a stretch though. Submetering is probably your best bet if it’s worth it financially.

Yes, own meters for each unit.  Currently, the 1st unit is being charged for gas/electric of the common areas.  I'm looking to remedy that. Thank you for your imput.  I was thinking submetering as well.  The basement is heated, but I need to check there may not be ducts to the entry, as you said.

@Sara Byerly I agree with @Marc Izquierdo that you should do ratio billing for the common area. I think submetering the common area on a two unit property would be to cost prohibitive. If you are to submeter the common area then you would have to get new HVAC systems or you would have zone them somehow.

You will need to install a house electric meter.  The property would then have a 3 meter service.  If there is heat element in common areas, that common area would be associated with that respective unit's utilities.  For electrical, you would be able to have a house meter and pay for that yourself.