Sub metering multis and tenants pay their own water

[Andy Sturm]

I have a 2 family that all the utilities have been sub metered so each tenant can be billed based on their individual consumption. The water provider will not read and bill sub meters. Therefore, we have a main meter that we as the landlord get billed for from the water company. We sub metered after the main meter for each unit. A private company reads the meters monthly and bills the tenants for us. The tenants pay us for the water not the company reading the meters and billing them, because we are the ones actually paying for their usage. They offer the service of receiving and distributing payments, but only if you have 27 or more units with them. 

One of the tenants has an issue with this. They want to be billed quarterly instead of monthly like the water company bills us. The company who reads the meters charges a fee of $4.80 to read the meters, that cost gets put on the tenant which she doesn't like. We also put a late fee of $10 if she is late. This is more than the water company would charge us if we were late and we have less opportunities to be late since we are billed quarterly. 

Submetering was new to us at this time and there is nothing written in her lease about her being responsible for the water bill. It was just set up just like you would set up utilities in a single family home. She just has realized she is sending the bill to the landlords and not a utility company and it has put a bad taste in her mouth. I believe she feels we are some how benefitting or making a profit which we are not. It ends up a wash every quarter.

Has anyone had any experience like this with a tenant? Im sure it would be helpful to have these things outlined in the lease but we do not. If she were in a single family and didn't pay her bill once the utility company would put a work order out to have the water shut off.  After three months could I begin to send her notices and shut her water off if she chooses not to pay? Can I evict her over not paying the water since it doesn't say in the lease I am paying for it or she is paying for it. Is there even grounds for eviction or do I actually have nothing and if she didn't want to pay the water bill, she doesn't have to? I have to continue to pay the bill because the other unit is on the same main meter. I could shut her unit off individually but Im pretty sure its illegal to just shut her water off even if she wasn't paying us for her portion. 

What I am looking for is some firm ground to stand on to push back a little on her. If I can evict her thats great. I dont plan on pursuing that, but at least I have some recourse.

[Account Closed]

 You can't take a chance on having a tenant come up with 3 months worth of water bill money at once.  You also can't be billing tenants differently.  And I'd tell her so.

How long has she been paying the bill this way?  Is her main complaint the monthly fee to read the meter?

What is her rent?  What is the average water bill?

I'd couch it this way: "Well, it seemed much more fair to meter your water separately, rather than charge a higher rent, that would be high enough to be sure my water costs were covered.  I thought my tenants would prefer to have a lower rent, and be able to control their water costs.

I'm also not willing to let a tenant pile up 3 months worth of bills they owe me, before I get paid, or treat some tenants differently than others.

Tell you what, if you'd rather not have to pay the monthly metered bill, with the possibility of a late fee, then what we can do is write up a new rental agreement for a higher rent that will include water, but will be high enough that I'll be sure it covers any water bill you might run up.

So, if you want to think about that option and get back to me and let me know if you'd rather pay a higher rent with the water included, that's fine.  I'll just need to have your current bill paid up first.  And I'll write up a new contract with the higher rent, with water included, which will be $100 more per month (or whatever you think is fair, but high enough to cover her doing anything crazy - and you don't really want her to accept this option LOL).  

And if you are really unhappy with both of those options, I will let you out of your lease with just 30 days notice, but you'll have to give notice by next week, so I can get the place rented during a good time of the year."

This way, she'll probably "willingly" choose to leave it the way it is.  You'll call her bluff, so she knows if she tries bullying you it won't work, and you are subtly telling her that she can be replaced.  Tenants tend to think they're irreplaceable.  Some of them need to be gently educated that you won't cry if they leave.

And I wouldn't worry about her suing or anything, until/if/when that ever happened.  

I had good luck dealing with these types of tenants this way.  And you can do all of the above in a "Shucks, maam, I really understand what you're saying...but..." way.  You can smile and keep a friendly tone, while letting them know the answer is no and if you don't like it, you're welcome to move.