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A tenant can be held to pay for the water they use if it is in their rental agreement.  With individual unit water meters, it is fairly easy to calculate water usage.  Many multi-unit building (i.e. apartment) landlords bill tenants for their water use without separate water meters and without actually knowing how much water is being used.  How are they doing this?


Landlords impose an arbitrary water allocation and billing practice sometimes referred to as Ratio Utility Billing System or "RUBS"  In that system, the landlord charges water use by some ratio like the number of residents in the unit, the number of bedrooms or perhaps by the square footage.  All of these systems assume constant and equal water usage based on the arbitrary ratios.  In fact, without sub meters for each unit, any such system used by the landlord will be inaccurate and therefore some tenants will overpay for their usage and some will underpay.


While it is our duty to conserve water (especially when in drought conditions), the RUBS water billing system may not promote conservation.  If a tenant knows their bill will be a fixed amount, then there is little incentive to conserve since overuse of water will not raise that bill nor will conservation lower it.  Even if the bill was on a pro rata percentage basis, overuse may result in only a small increase in the bill since that overuse costs will be shared by all the tenants, even the ones trying to conserve water!  Conserving will not be rewarded since a percentage bill may only lower slightly from one tenant's conservation effort when that effort is spread out to all the tenants. Therefore, this system seems very unfair.


Some Landlords are taking advantage of a loophole in the law to profit from water bills.  They simply charge the tenants collectively more than they pay for the water!  In a sense, they become a mini water utility and mark up the cost of water to their tenants creating a hidden rent increase in the guise of water billing.  Many have employed third party "billing services" who not only bill the tenant for a water use change based on some formula but charge a billing fee on top of that.


The CPUC has reviewed the matter and concluded that they will not regulate landlord water billing activity to protect tenants.  They decided that landlords are NOT a public utility since they are not selling water to the "public."  Therefore, they do not come under CPUC regulation.  In May 2001, as part of their decision on the matter (in the "Conclusion" section), the CPUC said...

"As we review the parameters that determine our jurisdictional reach, it appears that CPUC jurisdiction is decidedly limited when it comes to the protection of tenants from allegedly unfair charges targeted for water or sewer service imposed by landlords whose practices are not presently being scrutinized by any other governmental entity. Similarly, we lack authority to address the alleged plight of landlords who reportedly are unable to recover the rising costs of water and sewer services when they are rolled into rent. The Commission has no intermediate regulatory authority over these circumstances. The Commission only has the jurisdiction to determine whether or not a MHP or multi-unit apartment is a public utility.  It is entirely possible that a private entity, which does not qualify for public utility status, may nonetheless charge tenants water or sewer rates that, in other circumstances, might be considered unfair or unreasonable. By the same token, if a MHP or multi-unit apartment is determined to be a public utility, the regulatory laws that control the development of rates will result in charges that are legally just and reasonable but may be higher than the tenant would pay if the primary utility provider were charging them directly for water or sewer service.

Full text of the decision


If you want the CPUC to hear your opinion on the matter, Contact the CPUC and be heard

At the Tenants Legal Center, we review each water billing case presented to us by a client to find ways to fight any unfair billing practices. Unfortunately, without some consumer protection action by lawmakers, it remains a difficult situation for tenants.

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