What have you seen re: water meters. Located in Los Angeles County (Los Feliz, 90027 zip). Property is zoned R2-1XL so pretty sure I can only have two main water meters. Right now the two units I have share one. As I transition the property to a duplex + 2 ADUs, I am considering spending $10K+ to get another master meter put in. Then think I could have 2 sub meters put in (believe the limit is 1 per main water meter). All units would be metered so data would be there to bill the tenants (so no ability to question the bill) but landlord would still pay the bill given we can not have 4 main master water meters (can only do 2 x1 master meter + x1 sub meter combinations).
I could also just do RUBS on each of the 4 units based on # of occupants or square footage or another method (which is best???). This would not cost anything BUT tenants may be able to argue over bill more and I know RUBS has sometimes been outlawed in certain jurisdictions so would be less future proof. Also know that upon sale sometimes the presence of more water meters increases value.
Curious to understand the forum's opinion on the best water meter configuration given costs OR if it’s just not worth it and I should leave the one master meter and stick with RUBS on all 4 units. Either way, could always have the plumbers plumb the system to make it easy to put each unit on its own meter in future (so long as it’s not crazy expensive).
Below is my generic advice. Pay particular attention to the "End the complaints" section.
HOW TO SHARE UTILITIES 101
You have a property with two or more units and the utility meters are shared. There are a few options.
1. Pay to separately meter the utility. This can be very expensive and is usually the worst choice because you can't justify the cost.
2. Charge the tenants a higher rent rate and include utilities with their rent. This is the simplest method, but it also means your tenants are more likely to abuse the utilities by leaving windows open with the heat or A/C running, leaving lights on, ignoring the toilet that constantly flushes on its own, etc.
3. Pay the bill yourself, then reimburse yourself by charging the tenants based on a formula. This takes a little more work, but it's the fairest and reduces the likelihood of tenants that squander utilities.
If you choose #2 or #3, there are considerations:
Start with an average. Use varies throughout the year. Heating costs go up in winter, as does electricity due to the reduced natural light and more people indoors. Electricity can also spike in the summer with A/C. Contact the utility provider and get a historical average based on the last year of use. It won't be 100% accurate, but it will be close enough. I recommend you do this annually to adjust for utility increases and other variables. If your average heating bill is $150, you may not collect enough in the winter months when the bill reaches $225 but you'll collect extra in the summer when it drops to $65. If you base your tenant charges on the historical average, you should come very close to collecting the entire amount over a one-year period.
Charge a higher rate. If the water bill is $100 a month, increase the price by 20% (or whatever you decide is fair) to compensate you for the time required to split and bill and to cover additional use when tenants squander the utility. If the bill is $100 a month split between four units, increase it to $120 and charge each tenant $30.
How to calculate charges. Don't make it more complicated than it has to be. If you have four 2-bed/1-bath units with the same appliances, split it four ways and call it a day. You can make minor adjustments based on the type of appliances (dishwasher, clothes washer and dryer, air conditioning, etc.) and the size of the rental. If Apartment A is a 2-bed/1-bath with a washer/dryer and Apartment B is a 1-bed/1-bath with no washer/dryer, Apartment A should pay a higher rate. Another option is to split the cost based on the number of occupants in each unit but this also means you'll need to adjust the charges as tenants move in/out, so it requires more work and I wouldn't recommend it. I recommend a simple spreadsheet to check your math and it will make it simple to adjust each year.
End the complaints. Tenants may complain about your method of calculating how much each unit pays. They think it's unfair because they only shower once a week but can hear the upstairs neighbor showering twice daily. You can end this by showing them an actual utility bill. Why? Because a large percentage of the charges are base fees that do not change based on use!
I just looked at a utility bill with a total charge of $184.12 but $116.50 is from base fees! If I divide this bill by four units, each tenant would pay $46.03. If they were separately metered, each tenant would pay the $116.50 base fees and their individual use, which would be 3x higher than what they pay when sharing a meter.
There are many options, but don't make it more complicated than it needs to be. Tenants save money when using a shared meter, so there's plenty of room for error when calculating how to distribute the charges.
