[Requesting Advice] Duplex only has one water meter for 2 tenants

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[Requesting Advice] Duplex only has one water meter for 2 tenants

John Smith
Dallas, TX · Member since 2018 · 1 post · 0 votes

Hi All,

I recently found out a duplex I own only has a single water meter feeding both units. One of the tenants is currently paying for both sides and has been for the past two years. I only found this out when the water was cut off by the city for non-payment and the other tenant complained about not having water. The complaining tenant thought that water was covered by the landlord (which was not the case). I inherited this situation from the previous owner, who did NOT disclose this information to me or to the tenants which I also inherited. The tenant paying the water is having trouble getting the other tenant to pay for their portion of the water bill. Currently, the paying tenant is requesting that I install a second water meter. I called the Dallas water utility, and they are saying it will cost over $5,000 to install a separate water line and meter. Are there other installers besides the city that can do it for cheaper or are there any other alternatives? I'm barely breaking even, and this would be a huge cost for me. I heard about submetering, but I can't find anything regarding the cost to install or the monthly service fees. 

Any help would be greatly appreciated!  Thank you in advance!

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Jedd Braunwarth
Investor · Waconia, MN · Member since 2014 · 238 posts · 104 votes
8y

@John Smith, do you know if the plumbing is already separated for each side of the duplex? Is it a side by side or top bottom duplex style? The largest cost is obviously the plumbing alterations and if you can avoid them. If you can, the easiest may be to switch the water utility to your name, submeter both sides of the property and each tenant pay their usage to you based on the two meters. I think even submetering one side will cause tenant complaints, arguments, non-payments, etc. This happens even more with RUBS. Full disclosure, I own a submetering company but have seen it all happen because of this!

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  • Josh C.Pro Member
    Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
    8y
    Not sure your laws, but you can buy a very accurate water meter for under $200 and installs quickly. Then you can pay the whole thing and bill each tenant their usage. Only problem is you have to go out there and read it each month. You could also use RUBS. Again check your local laws. Good luck
    0Reply
  • Jedd Braunwarth
    Investor · Waconia, MN · Member since 2014 · 238 posts · 104 votes
    8y

    @John Smith, do you know if the plumbing is already separated for each side of the duplex? Is it a side by side or top bottom duplex style? The largest cost is obviously the plumbing alterations and if you can avoid them. If you can, the easiest may be to switch the water utility to your name, submeter both sides of the property and each tenant pay their usage to you based on the two meters. I think even submetering one side will cause tenant complaints, arguments, non-payments, etc. This happens even more with RUBS. Full disclosure, I own a submetering company but have seen it all happen because of this!

    1Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    8y

    Legally, you can't do anything because your tenant is under a lease. Negotiating new terms requires agreement of all parties.

    Here's what I recommend. Contact Tenant B and politely explain that you were all unaware of the situation and you are not looking to punish him. However, he's had a free ride for two years while the tenant next door has suffered for two years. The right thing for Tenant B to do is start paying his share by splitting the water bill.

    It sounds like he will refuse, so you move to Plan B and tell him that because he refuses to play ball, you will not be renewing his lease when it ends. Or...if he is under a month-to-month, tell him you will give him notice to vacate and start fresh with the next tenant.

    Another recommendation: don't make Tenant A take the bill to Tenant B and attempt to collect. Look at the water bill for the past year and get an average. If it averages $50 a month, reduce the rent for Tenant A by $25 and increase the rent for Tenant B by $25. This means Tenant A is paying you $25 less to make up for the extra $25 he pays in water and Tenant B is paying you the $25 missing from Tenant A. 

    I hope that helps!

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  • Tony Flores
    Flipper/Rehabber · San Antonio, TX · Member since 2017 · 10 posts · 2 votes
    7y

    Just curious on the resolution for this. I’m buying a duplex with same issue. 

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  • Joe Scaparra
    Investor · Austin, TX · Member since 2013 · 662 posts · 1k+ votes
    7y

    You have a couple of issues to navigate.  It is not as easy as putting in another water meter.  That is because the water pipes in the duplex probably are not configured to flow to each side separately.   Usually, the cost of putting in another meter is not the meter itself but the connection fee to the city lines.  They want their cut just to connect.  

    You could put the water in your name and then charge the water individually to each unit.  You could either charge a flat fee that you hope will cover the expected cost.  You could also charge based on the number of occupants.  Putting the water bill in one of your tenant's name subjects your tenants to water cut off due to no fault of their own. 

    You now know to ask if there are separate utility meters when purchasing multi-family properties.  I have a 4 plex with one water meter.  I charge each unit an additional $25 per month and just eat excess water charges if any.  Good luck!

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  • Ben Pospisil
    Rental Property Investor · Dallas, TX · Member since 2019 · 17 posts · 13 votes
    7y
    Originally posted by @Tony Flores:

    Just curious on the resolution for this. I’m buying a duplex with same issue. 

    Tony  I’m having similar issues here in dallas.  Did you ever get your squared away?  I’d love to chat with you about it  

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  • Tony Flores
    Flipper/Rehabber · San Antonio, TX · Member since 2017 · 10 posts · 2 votes
    7y

    Hi Ben, I didn’t separate the meters. I understand that you can’t charge more for utilities than the tenants are using.   Since it’s impossible to create a true cost per side, I just waited for renewal time and made adjustments based on fair market rents. 

    I wasn’t sure how long I would be holding the property, and I didn’t think find a  cost effective way to do it. 

    Good luck and let me know if you find any way that makes sense. 

    0Reply
  • Ritesh Jhawar
    Member since 2020 · 4 posts · 0 votes
    6y

    Hi John,

    Was this ever solved for you? 

    I just bought a single family home and am converting it to a duplex. 

    I was hoping that I could keep the single water meter and just submeter water to both tenants. 

    Is this possible? If we could do this, we could just allocate sewer costs based on water usage proportion. 

    Your help is truly appreciated.

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