Capping water expenses without having separate meters?

Question

Hello all, I own a 4 unit apartment complex in Kansas where I pay all water and sewer. The units are not metered separately so the bill for the entire complex comes as one payment - to me. The cost is relatively low and I pay it with a smile on my face, however in Dec/Jan/Feb I had a running toilet that cost me $1500 in water bills, FAR more than usual. The tenant never let us know there was an issue and by the time I found out, I was on the hook for the payments.

In my future leases I would like to cap the water expenses I pay at $200 per month. Anything over that will be distributed equally and charged to the tenants.

Is this something I can legally do given the fact that I don't have the water metered separately?

At this time, I don't want to pay to have them separately metered, but am open to it in the future. To be honest I'm not sure how much it would cost to have them separately metered, and I'm deployed right now, so managing projects is difficult.

Eli Molloy · Answer

I don't know about splitting the bill but here is a thread about leak detectors and alarms from last week. One or a few of these could help alert you next time this is an issue.

https://www.biggerpockets.com/forums/52/topics/412542-water-leak-detection-devices?page=1#p2587838

Anna Andreyeva · Answer

Hi Chris,

Did you ever get that quote from http://www.guardianwp.com? I am considering sub-metering my 4-plex, and I believe they work in my area - would love to know roughly how much they would charge.

Thanks :)

Chris Dawson · Answer

@Tim Nelson you might want to check into a sub-metering company to see what it costs to sub-meter your water bill (or any other utility).  This is different and a lot cheaper than installing separate meters.  They basically install a water monitoring device for each unit and track the water usage.  You can also have them automatically bill your tenants for you or you can do it yourself.  If you don't want to bill your tenants, then you can still monitor the usage which will help identify leaks and heavy users.

http://www.guardianwp.com/ provides this service for KS and MO as well as 40 other states.  I have not used them before and I don't know what the cost is, but I do have a request in for a quote on a 4 plex that we are getting ready to renovate, so I will post back here what I find out.

Patrisha Leybovich · Answer

Hi there!

I totally get your perspective, but here's a bit of reality. In the rare instances when your tenants do cost you an unexpected arm-and-a-leg for a plumbing or sewer bill, you'll find that they generally don't have the money to reimburse you for the expense and it ends up costing you a turnover...

You can absolutely amend your leases to require the tenants pay a percentage (in this case 1/4) of the utilities. I actually suggest you cap the allowable bill back amount to secure their interest, and then be willing to eat it in the event a pipe breaks, etc.

The other thing you can do is impose a penalty for not notifying you of the necessary repair. This way you can get something from them that's reasonable without running the risk of unwanted vacancy.

But, yes, billing back tenants for unseparated meters is a normal practice and you are within your rights to either ask for a percentage repaid, or else tack on an increased rent (like a budget plan) specifically for utilities.

Good luck!

Tim Nelson · Answer

Thank you all! Once I am back stateside I will look into making the switch. Patricia, thanks for the advice on the lease. I'm amending it for all future tenants!

Max T. · Answer

retrofit old toilets with the duo-flush system

takes 20 minutes and $30 each

https://www.amazon.com/Fluidmaster-550DFRK-Flush-Complete-System/dp/B008NHRW76

Brandon Sturgill · Answer

@Tim Nelson Get sub-metered...you won't ever have this issue again: http://www.guardianwp.com/

These guys may be in your locale...if not, there is likely a similar company. Water is tough because it is typically tied to the property owner...at least it seems to be in most parts of the country. I would stop paying any utility bills asap (or pay and bill the tenants)...unless you make enough money that you need to offset expenses...but a water bill will hardly help lower your tax basis...

And send the bill to the tenant with the leaky toilet that failed to notify you...

Seth Borman · Answer

Your local utility may offer steep discounts on water saving fixtures. It could be part of a larger program to reduce expenses and pass along costs.

Capping water expenses without having separate meters?

Most Popular Reply