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Utility Submetering is the implementation of a system that allows a landlord, property management firm, condominium association, homeowners association, or other multi-tenant property to bill tenants for individual measured utility usage. Typical users of submetering are mobile home parks, apartment complexes, and commercial buildings. Usually, utility submetering is placed in situations were the local utility cannot or will not individually meter the utility in question. Utilities are often reluctant to take on metering individual spaces for several reasons. One reason is that rental space tenants tend to be more transient and are more difficult to collect from. By billing only the owner, they can place liens on real property if not paid (as opposed to tenants they may not know exist or who have little to lose if they move without paying). Utilities also generally don't want water meters beyond their easement since leaks to a service line would be before the meter and could be of less concern to a property owner. Other reasons include difficulty in getting access to meters for reading, or electrical systems and plumbing not suitable for submetering.
Additional recommended knowledge
Before submetering, many landlords either included the utility cost in the bulk price of the rent or lease, or divided the utility usage among the tenants in some way such as equally, by square footage, or some other means. Without a meter to measure individual usage, there is less incentive to conserve or stop water leaks, since the other tenants or landlord may pay all or part of those costs. Submetering creates awareness of water and Energy conservation since the tenant will pay for all of their usage and any leaks they allow to remain unrepaired. Conservation also allows property owners to keep the cost of rent reasonable and fair for all units regardless of how much water, or energy they consume.
In submetering, there is generally a "master meter" which is owned by the utility supplying the water, electric, or gas, and usage is billed to the property owner. The property owner or manager then places their own private meters on individual tenant spaces to determine and bill each tenant for their share. In some cases, the landlord may add the usage to the regular rent or lease bill. In other cases a third party may read, bill, and/or collect for the service. Some of these companies also install and maintain meters and reading systems.
The latest trend in submetering is Automatic Meter Reading, or AMR. This technology is used to get from meter reading to billing by an automated electronic means. This can be by handheld computers that collect data using touch wands, walk or drive-by radio, fixed network systems where the meter has a transmitter or transceiver that sends the data to a central location, or transmits it by wi-fi, cellular, or internet connections.
Although not technically submetering, an alternate method of utility cost allocation called RUBS (Ratio Utility Billing Systems) is sometimes used to allocate costs to tenants when true submetering is not practical or not possible due to plumbing or wiring constraints. This method divides utility costs by square footage, number of occupants, or other combination of cost ratios.
Submetering History and Laws:
Submetering was "invented" sometime in the 1920s, in fact, many laws currently affecting submetering were written then. However, submetering really did not take a hold in the property management world until the late 1980s with the ever increasing costs associated with utilities and a more aware society of environmental conservation. Rent controls in some cities has also created an incentive to conserve and keep landlord costs under control.
Landlords or property management companies wishing to submeter should check the laws of their state or locality. Many states regulate submetering with some of the same laws as a public utility. There is a chance a landlord may be responsible for water quality in some jurisdictions, and periodic testing of meter accuracy. Some states require that no profit be made for submetering to keep from being held to the same standards as a licensed public utility.
|This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Utility_submeter". A list of authors is available in Wikipedia.|