Duplex, can I bill back water to the tenants, single meter? KCMO

[Neel P.]

Hi all,

I'm evaluating a duplex deal right now in Kansas City, Missouri. It's my first ever multi-family deal, so learning a lot right now.

1. The broker says that tenants pay gas & electricity, and the owner pays water, sewage, trash. Is this normal?
2. The water meter is a single meter. The broker is claiming that this can be billed back to the tenants. Is this true? I can't figure out the exact answer for whether its legal to bill back water if its a single meter.
3. If its a single meter, can I change this to individually metered? Or is the cost for doing this typically a lot? This is an older building (1954).

Thank you for any insight!

[Andrew Syrios]

This is the case sometimes, especially with duplexes that were made by converting a house. You can bill back the tenants, although you might have some issues with tenants being angry because the other tenant (supposedly) used more. And you need to make sure you are billing back no more than the amount the utility company billed you. I believe it's illegal to make a profit on utility billbacks but don't quote me on it. (It's always a good idea to check state laws on these sorts of things.)

For us, when it's a duplex or so, we usually just advertise the units as "all bills paid" and charge a bit higher rent. Not ideal, but it's worked fine in the few instances we have like that.