Water Fee Might Not Be Fair, but It’s Legal

Question: For eight years, my wife and I have lived in a one-bedroom apartment in a 320-unit community with 20 buildings. Until now, we have paid our own separately metered gas and electric bill, while the water and sewer charges had been included in our rent.

We have been notified that when our lease expires, we will be charged a flat monthly fee added to our rent to cover the water and sewer.

The units are not individually metered and include one- and two-bedrooms. The same amount will be charged to all tenants even though the units are different in size and some people have families.

In the absence of individual water meters, are these charges legal?

Property manager Robert Griswold replies:

Yes, as long as the landlord gives you proper notice and makes the change effective upon expiration of your current lease.

An entirely separate issue is whether the charges are equitable as proposed. Since the majority of multifamily apartment communities are master-metered for water, the residents have no incentive or accountability to conserve water, while owners throughout Southern California are facing significant increases in their water and sewer charges.

For many years, the only way owners could recover increasing costs, such as water, was through rent increases. However, many tenants object to general rent increases and would welcome the ability to keep their rent from increasing if they help the owner control costs.

There are many new systems available for rental housing that will allow owners to retrofit each unit with a water meter that records water use.

Frequently, the owners contract with independent firms to bill the individual tenants for water use, just like the electric and natural gas utilities. Many tenants may be too young to remember that until the 1970s, most multifamily buildings were master-metered for electricity.

For owners who want to encourage water conservation or pass along the increased charges, there are a variety of methods commonly referred to as RUBS, or residential utility billing systems.

RUBS can be any form of allocating some or all of the water charges back to the tenant. The landlord can either install a separate common-area water meter or deduct a certain portion for the common area and landscaping uses at the property, and then spread the balance among the residents.

There are no official guidelines or regulations regarding the proper allocation formula, thus the potential for disagreement.

Obviously, you feel that you will be charged more than your fair share as you are in a smaller unit with two occupants. While there is no perfect system--some people are water misers and some can be water hogs--I agree that the landlord could come up with a more equitable system, possibly based upon unit size.

Out-of-Town Check Could Portend Trouble

Q: I just rented out a condo and took an out-of-town check as the security deposit. Friends tell me that was stupid. Is it?

Ted Smith, principal in a law firm representing landlords, replies:

The rule is: Never give up the keys to the unit until that out-of-town check clears.

If you took a poll, most savvy landlords get cashier’s checks or money orders for all upfront money, including security deposit and first month’s rent. The worst mistake you can make is to take a check for the rent and deposit and give out the keys, only to find out later that the check bounced.

You’re stuck with having to do an eviction at that point.

Property manager Robert Griswold replies:

Most likely you are not a major landlord with hundreds of units but the owner of a single rental condo.

As a relative novice in the rental housing industry, you are the target for devious types who will take possession of your condo on a bad check. When you get your condo back in three months, I can guarantee it will be a disaster.

Establish clear and firm procedures that include a thorough applicant screening process, and require a cashier’s check or money order before move-in.

Don’t forget that cashier’s checks and money orders only indicate that they will not be returned for insufficient funds. Banks will stop payment on cashier’s checks and money orders if they are reported stolen or missing.

The vast majority of tenants are very responsible and honest; however, it only takes one.

Extra Insulation Benefits Both Tenant, Landlord

Q: My tenant complains of high utility bills and is now demanding that I install additional insulation in the rental home. Who is responsible?

Steven R. Kellman, director of the Tenants’ Legal Center, replies:

The law does not require any specific amount of insulation in a rental other than what the building code required at the time the unit was built. Only in recent years has insulation been required by the codes.

The law, however, does require a rental to have adequate weatherproofing against the cold, wind, rain or heat. Thus if the insulation, or lack of it, is so bad that tenants are unable to keep their unit at comfortable temperatures, then the landlord must act to correct the problem. This may include adding weather-stripping, sealing doors and windows, and even perhaps adding insulation. Excessive utility bills may be evidence of a problem that the landlord needs to correct.

Property manager Robert Griswold replies:

While the landlord only has a legal obligation in the event of insufficient weatherproofing, a prudent landlord will realize that installing or upgrading the insulation can have many positive benefits to the landlord.

First of all, the weatherproofing is an improvement to the property that will maintain and preserve the asset. Second, if the improved weatherproofing leads to lower utility bills, the landlord benefits indirectly in that the tenant will have lower financial obligations and therefore more of a financial “cushion” to keep the rent current.

Naturally, the tenant is also more likely to stay in the rental home if the property is well-maintained and energy-efficient and the utility bills are reasonable.

Future tenants will have the same concerns. My suggestion is for you as the landlord to turn this lemon into lemonade and take the necessary steps to properly weatherproof your rental home.

This column is written by property manager Robert Griswold, host of “Real Estate Today!” (KOGO-AM [600], 1 p.m. Saturdays), and attorneys Steven R. Kellman, director of the Tenants’ Legal Center, and Ted Smith, principal in a law firm representing landlords.

If you have a question, write to Rental Roundtable, Real Estate section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053. Or you may e-mail them at griswold@cts.com. Questions cannot be answered individually.