BILLING FOR WATER NOW OR IN THE FUTURE

Traditionally in apartment communities, water is paid for by the property owner and included in the resident’s rental amount. Most apartment communities do not have separate water meters for each unit. Due to the increasing cost of water and technological advances in water flow measuring and resulting lower costs of retrofitting, many apartment communities are hiring companies to sub-meter their units and handle the billing aspects. This cost shifting results in tremendous savings to the owners of the apartment communities, and most likely also results in water conservation overall. The task of sub-metering is not difficult in most buildings but the legalities of getting the resident to now pay for the water that was once included in their rent presents some challenges.

The Current Resident Problem

Most leases simply state that water is included in the rent or it is the owner’s responsibility to pay water. In cases like this, if an apartment community decides to sub-meter, there is no way possible to make the current resident under the current lease pay for the water. If it was not in the contract, they are under no legal obligation to pay for water. The only option the manager has is to non-renew the resident’s lease at the end of the term and offer a new lease with the proper wording in the lease stating that the water is the resident’s responsibility.

A common provision found in many Florida leases states the following:

Insufficient Lease Clause

…Unless separately metered, we supply the water and sewer for normal usage. If separately metered, you must pay the water and sewer as additional rent when rent is due. If you do not have separately metered water, we may add separate metering…

As you can see from this clause, it would appear that in the event the unit was sub- metered after the resident moved in, you would be able to now make the resident pay for the water as additional rent when rent is due. Unfortunately the clause is not very clear, does not cover all scenarios and we know that ambiguity is construed in favor of the resident.

Suppose You are Going to Institute a RUBS Program?

Ratio Utility Billing Systems (RUBS) is a system whereby the manager charges water use by a ratio like the square feet of the unit, bedrooms and/or the number of residents in a unit. This system avoids the retrofitting necessary to sub-meter an apartment building, but has its own problems as well. Many residents feel this system is unfair, as it could be inaccurate, as some residents will invariably overpay for usage, while other residents will underpay as these systems assume constant and equal water usage. Can an apartment community use the sample clause above if they decide to implement a RUBS program? The answer would be no, as that clause only addresses sub-metering. Therefore, if the lease does not address the possible future implementation of a RUBS program, there is no way you can impose it on a current resident.

A Possible Lease Clause Based Solution

Even if you have no immediate plans to sub-meter an apartment community or institute a RUBS program, we feel that your lease should allow for the possibility at a later time. Water costs may increase dramatically, you may sell the apartment community, or you may just decide that RUBS or sub-metering is the way to go. Without a proper lease clause, your hands are tied.

Sample Lease Clause

Currently water and/or sewer is provided by the Manager and Resident agrees to use same in a reasonable manner. Resident agrees that at some time in the future, Manager may pass this cost on to the Resident, and Resident agrees to pay for water and/or sewer each month upon demand with the monthly rental payments as additional rent, as Manager may decide to sub-meter the apartment or institute a Ratio Utility Billing System whereby Resident agrees to pay upon demand the cost of water and/or sewer based upon a formula taking into account factors including but not limited to the unit square feet, number of bedrooms and/or the number of residents. Resident shall be given 30 days prior written notice by Manager if Resident becomes responsible for paying for water and/or sewer.

The Importance of Disclosure

While a clause potentially making a resident responsible for water at a future time is legal, when the time comes to implement the clause and begin billing the resident, sparks will fly. There will be cries of unfairness, surprise and alleged verbal promises. If you intend to use such a clause, we recommend that it is clearly pointed out to the resident or possibly placed in a separate document as an addendum. A water/sewer bill could substantially increase the rental amount, and we recommend that before you sub-meter or implement a RUBS program you check with your attorney on the plan of action and legalities.