Part 2, May 2009  go to part 1

 

By Jeff Lowry, President of Submeter

Solutions, Inc., RHA Associate Member
In the case of rental properties that only have one gas, water, or electric meter you are probably struggling trying to figure out how to charge your tenants for what they use. Sub-metering is a great way of having your tenants pay for what they use.

 

Last month we discussed that you are allowed to meter and bill each tenant for the utilities they use by installing individual meters for each tenant. You then bill them each month for the amount they have consumed since their last billing.

 

This month we are going to look into more detail about sub-metering the water, gas, and, electricity utilities.

 

Water: A bonus about sub-metering water is that you may recover the costs for both water and sewer usage if the utility sewer charge is based on water consumption. If you look at your water/ sewer bill you’ll notice that the sewer charge is typically higher than the water charge. To get the most accurate account of how much water tenants have used during the month is to have both their hot and cold water usage metered. The best case is where a plumber has access to a single water line going into a tenant unit then branches off of to feed their hot water heater and cold water fixtures. In this case you may purchase a water meter, often times under $100, and have them install it in-line with the feeding water pipe. It is ok if the meter isn’t easily accessible for reading. There are options for remotely reading the meter. In many older buildings, however, the water pipes into each tenant unit may not have a single point of access. This can be a bit tricky. In this case I’ve seen building owners sub-meter the water going into the tenant’s hot water tank. Though this doesn’t capture all the water used by the tenant, the landlord will use the percentage of hot water used by this tenant compared to the other tenants as a way to split the water bill. They figure the percentage of hot water used by a tenant is close to the same percentage of cold water used by the tenant compared to other tenants.

 

 

Gas: Small gas sub-meters are available for under $200. With remote reading options you may install these meters in tight places inside the tenant’s unit. No venting is required. Often times they are installed where the gas hot water heater and furnace are located for easy access to the gas line coming into the tenant’s unit. Building contractors can typically save building costs by distributing the meters throughout the property and installing a remote sub-metering solution rather than locating the meters all in one location. This cuts down on expensive piping costs back and forth to each tenant’s unit.

 

Electricity: Small electric sub-meters are available that attach to existing electrical panels or individual circuits. Cost per meter is around $300. Usually no changes are needed to your existing wiring. So typically this means no permit is required! You could also use the lower cost glass type meters but changes in your wiring are required since the power needs to flow through this type of meter.

 

Last month we mentioned that pretty much any type of splitting of the utilities is allowed as long as it is spelled out clearly in your leases and meets the requirements, if any, stated in local third party billing codes. As mentioned before the city of Seattle has a third party billing code with easy to read Questions and Answers that I’ve found very helpful. See http://www.seattle.gov/examiner/3rdpartybil ling.htm

 

I hope I have given you some ideas of how you might be able to charge your tenants for the utilities they use thus saving you money and promoting conservation.

 

This article contains general information and the author makes no claims to the accuracy of the information provided in this article. It is data and understanding that has been gathered about sub-metering over the years.

 

This article was written by Jeff Lowry, president of Submeter Solutions, Inc. located in Renton, WA, 425-228-6831. Submeter Solutions, Inc. is an associate member of the RHA and offers solutions for sub-metering properties throughout the country. Their web site is www.SubmeterSolutions.com  

 

Part 1