What To Do If Your Duplex only Has One Meter

Question

Hello, Just wanted to hop on and see if anyone can lend some help on how to proceed in this situation.

Just closed on my Duplex, although its not really a duplex it is a 3X2 SFR with a 2X1 ADU. Didn't realize until after that there is only one meter. I can get that taken care of as I have the contractors that will do it, and estimates. However in the meantime, once I get a tenant, how do I go about the bill, since the electric will be in my name. And it is a house hack so i will be living in the ADU for 1 year.

Any advice is helpful.

Thanks

Theresa Harris · Answer

Is it just electricity that is on one meter or is water the same?  For water, I'd base it on number of people living there, for electricity, base it on number of bedrooms or square footage.  How are the homes heated and cooled?  Gas, electric?

As long as you write it out in the lease and it is transparent, you should be fine.  I wouldn't include it as part of the rent as people have a way of abusing it.

Chris Levarek · Answer

@Gabriel Morales As mentioned, there can be laws that allow or don't allow RUBS which is Ratio Utility Billing System or spreading utility costs according to sq footage for example. For example, areas in Greensboro, North Carolina it is not permitted.

Submetering or using monitoring tools at the line or water entry to sink, toilet, etc. can be another way. This uploads data to a online cloud platform which you then can send invoices or billing with.  Alot of this is more common in apartment complexes or larger properties however.

Running another line is very pricey so IF you find RUBS or submetering is out of the question, you can however, add in a property management fee or the like which could help offset some of the cost...Or simply charge more rent. Either way have it on paper and documented so nobody is unaware.

Cameron Del Valle · Answer

This is certainly an interesting situation.  If you live in the adu, I would meter the adu with a water meter and subtract the usage from the city bill.  That way it is fair and accurate for both units, and you pay for exactly what you use rather then an estimated amount.  Since you live in the adu, it should be no issue installing. I would be happy to discuss more options with you, feel free to message me.

Gabriel Morales · Answer

Thank you, I think that is what I am doing lol, I was just going over the landlord tenant act for my State AZ, and I actually can do sub-metering or a rubs system.

Zeb B. · Answer

I would estimate the average monthly bill and then add a monthly flat fee to their lease to cover the appropriate portion of the utility bills. I have a duplex with a shared water meter. The lower (bigger unit) pays a water/sewer flat fee of $75/month. The upper (smaller) unit pays $40 per month. When I do the lease renewals I look at the water bills and adjust the flat fees as appropriate.

The fees are essentially part of their rent so I could charge whatever I negotiate with the tenant. I keep the utility fees fairly related to the cost of the utility bills, but I don't bicker about it they are a bit lower or higher than the average utility bill for the year.

I like to show utilities as a separate line item on the lease, so I can advertise the unit as $900 rent and then tell them there is a $75/month water fee elsewhere in the ad and during the inquiry/showing/lease process. I feel like a $900 unit with a $75 flat fee for water will sometimes look better in an ad than a $975 unit with "free" water but that is just a judgement call on my part.

For water I think the flat fee method works ok, because there is really not that much incentive to use up a ton of "free" water unless they are irrigating the lawn a ton. I manage my irrigation systems, so when there is a high water bill it's usually because a toilet is running and I get it fixed ASAP. For something like the electric bill flat fees can be more problematic. Electric heating and cooling can really increase the bill depending on how the tenants act. Running the heat in the winter with windows open might happen if you pay the electric bill. For those cases it might be worth paying for separate meters.

If you are on a month to month lease, you could adjust the rent accordingly if the electric use gets out of hand.

Rick Albert · Answer

With our ADU the water is shared. I charge a flat water fee and say that if the bill exceeds $X then the difference is split based on square footage.

You could do the same with utilities. It is likely going to be costly to split the meter, although you might save some money in the long run. Having the separate meters helps in not being pushed into a higher priced tier based on usage.

I do understand Theresa's point about the number of people living there and charging accordingly. But be careful that you don't walk into discrimination laws because of family status. Although logically it makes sense, doesn't mean that it is considered legal.

Eliott Elias · Answer

Charge a base fee for each unit

Nicholas Coulter · Answer

@Gabriel Morales I would call your city planning department to see if you can get them split. If not I would charge a flat rate to the unit you dont live in.

Cameron Del Valle · Answer

You would probably spend 1k on a wireless system and find a RBC company to send out the bills.  You might have a hard time with such a small property, but if you would ever want a formal quote and go over submetering I would be happy to do so.  I am a national sales rep for QMC Submetering Solutions.

Gabriel Morales · Answer

Reviewing the AZ landlors tentnat act, we can utilize RUBS or sub-metering. What is submetering? A device I install, can I google it>?

What To Do If Your Duplex only Has One Meter

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