Split water bill in Pittsburgh area?

Question

I was thinking about splitting out the water meters on my 9-unit in the Pittsburgh area (PWSA) and called the water company about it. They explianed what I would need to do, but also suggested a much less expensive alternative: sub-metering.

I would install my own meters on each line, and simply divide up my water bill accordingly.

Since the idea came from the water company, I have to assume that this is legal, but how can I find out with certainty? My manager isn't sure about it.

Thanks!

Steve Babiak · Answer

See this thread for some info:

http://www.biggerpockets.com/forums/52/topics/72185-water-sewer-bill---what-to-do-with-it

Michael D. · Answer

Sean H., how do you calculate the billing?

My plan is to essentially replicate how PWSA bills me and pass that along to the tenants.

They'll each pay their share of the flat-rate charges plus their pro-rated amount of usage-based charges based on the meters I install. I'll pay the flat-rate portion for vacant units. Is this what you're doing?

How do you pass the bill to them? Do you mail out something in September for August's bill? Do you call and let them know? Is it just a flat-rate that you establish up-front?

Steve Babiak · Answer

In Pa, water and sewer are lienable, as Sean H. mentioned.  But it does vary by municipality.  If water is not supplied by the municipality itself, but by a private company, it is not lienable.  Sewer likewise (I don't know of any sewage that is handled by private companies other than septic systems, but if there were ...).  In Philadelphia, natural gas is lienable too!

If you are billing tenants for approximate usage and it isn't metered tenant usage, you should check the link I posted above to see what attorney Brad Dornish writes regarding this practice.

Sean H. · Answer

I am not sure what it is like in other states, but in PA, water and sewer bills are lien-able.  If the bills are in the tenants name, the water and sewage companies can not provide a status of the account, but they have no problem placing a lien for unpaid bills.  So while I do include the water and sewer bills in the lease as the tenants responsibility, I have learned the hard way to keep them in my own name to prevent delinquencies.

Michael D., I own rentals in the Pittsburgh area and do charge tenants for their water.  I am a small sample size for sure, but there are others who do it.

Joel Owens · Answer

Plan on chasing a few each month to pay the water bill.

If your meter is not from the water authority they will also say your meter isn't working properly or is billing them for more water that another tenant is using.

All depends on the type of renters and area you are working with.

I know an investor that owns an older 150 unit.They submeter and bill the tenants.75% pay the water bill they get and the rest they have to chase after to get payment.

If all your tenants end up paying the water bill you send them count yourself lucky.

Michael D. · Answer

Joel Owens, I'm not too clear on what's customary in those parts. It seems to be a mixed bag. SFD of course always pay their own. The water company said lots of people (landlords) submeter, so I'm sure it's not too uncommon.

More than anything, I just want each tenant to be responsible for their own consumption. We'll all be better off for it.

I plan to pay the water company directly myself so I know it will be paid. I'll just divvy up the bill based on consumption and forward the charge to the tenant.

I don't think I'll get a bunch of deserters over it. I plan to reduce the rent accordingly. This means I won't be saving all that much money, but to me it's still worth it. I pay about $75/unit now,. I think if I reduce the rent maybe $50-60/unit it won't scare anybody off and I'll end up $15-25/unit better. If they reduce their consumption they might end up actually saving money each month, and so will I.

Joel Owens · Answer

Micheal,

What is customary for the area where you own the property.If other apartment buildings include water with the rent then I wouldn't separate out.

The tenants for that area are conditioned to have water included and many will move elsewhere on you.

If you just have an old building that needs to be metered out and tenants paying for water is custom for the area then go ahead.When tenants do not pay for water they use on average 35% more and do not report leaks with the property as they don't care.

Direct meters the tenant will be responsible for from the street.If they do not pay they cut off that unit.If you put a meter just to read for yourself and then bill the tenant you the landlord can be still responsible to pay to the water department.

It all depends on how the local water authority handles things where you own the building.Water is like liquid gold so if you can control it your bottom line will be better for it.

Michael D. · Answer

Great link Steve Babiak, thanks.

I just got off the phone with Rick Obermeier over at PWSA and he says that it's perfectly fine to submeter and that a lot of people do just that.

From the other thread, it also looks like it's a good idea, although it's probably going to cost me $6-8k for my 9-unit to split everything out.

Michael D. · Answer

Do any of you in the Pittsburgh area know if it is okay to sub-meter a building on PWSA water? Are any of you doing that currently?

Thanks!

Split water bill in Pittsburgh area?

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