LEGAL ISSUES RE RUBS AND SUB METERING

2018 SB 7 LAW (s.sdcpm.com/submeters)

you can generally do RUBS billing for water in the City of San Diego (assuming you don’t have submeters for the water). However, there are a lot of potential issues with RUBS billings, and you ideally should use a well drafted utility addendum.

 

Landlords and property managers should use sub-metering and RUBS (ratio utility billing systems) to allocate utility costs to residential tenants only after an analysis of their risks and limitations.  A number of residential landlords, property management companies and billing companies have been sued for alleged unfair business practices in connection with aspects of their utilities cost shifting programs in California.  We have also seen actions filed by district attorneys against landlords for their utility billing practices. Bonnie Dumanis in San Diego is one of the district attorneys who has filed actions against landlords in connection with utility billing practices.

 Kimball, Tirey & St. John offers an opinion letter on utilities, describing the issues and risk management decisions to be made when implementing a utility cost shifting program. The cost is $750 and includes a detailed utility addendum designed to help reduce risk. The opinion letter addresses each of the following utility cost shifting issues:

The Submetered Water Addendum is only needed if water is submetered.

 

If water is not submetered, generally, you can use RUBS for water, and the KTS lease is sufficient.

 

There are a few water providers that don’t allow RUBS for water (but I’m not aware of any water providers in San Diego county who don’t allow use of RUBS for water).


 

A)  Disclosures in rental advertising

B)  Disclosures before accepting application fees

C)  Tenant as direct utility customer when meter measures utilities outside of the tenant’s unit

D)  Common area billings

E)  CPUC regulation

F)  Water and sewer regulations and restrictions

G)  Submetering and California Department of Food and Agriculture, Division of Measurement standards claimed jurisdiction over sub-metering

H)  Water quality regulatory requirements

I)  Use of hot water submeter readings to bill for other utilities

J)  Hot water delivery charge

K)  Volume discounts

L)  Gas and electricity regulations and restrictions

M)  New account fees

N)  Administrative fees, billing fees and closing account fees

O)  Security deposit deductions

P)  Subsidy program requirements and rent control restrictions

Q)  Lease provisions, bills and tenant verification of utility charges

R)  Terminating utilities

S)  Billing company disclosures

T)  Late fees

U)  Charges to tenants who fail to become the utility company’s customer of record

V)  Charges to tenants in response to a tenant breach

W)  Dispute resolution mechanisms for utility billing disputes

X)  Risks inherent in RUBS

Y)  Utilities as a profit source

Z)  Changes in utility billings to existing tenants

AA)  Enforcement of tenant rights 

BB)  Enforcement of utility provisions in leases against tenants