There are many landlords who rent individual units
which share utility meters. A house, subdivided into three rental units, might only have
one meter, and the cost of separate metering may be prohibitive. The utility expense must
be absorbed and paid by someone. The issue is how best to do it while preserving what is
usually an inexpensive and useful housing option for the tenants.
Often, this is accomplished by the landlord dividing the utility bill for the house by
three and presenting a statement to each of the three tenants. This method has a number of
things going against it.
In most jurisdictions this type of utility subdistribution is illegal. Just as only
doctors can charge medical fees, lawyers legal fees, and architects architectural fees, so
have utilities been granted a monopoly on charging for utility service distribution. The
subdistribution of utilities for a consideration is usually a violation of law, and in
many jurisdictions, a crime. Some municipalities have enacted ordinances which impose
draconian penalties for such arrangements.
The prudent landlord with such a building to let will look at his utility usage history
and set the rental rate at a level that will reimburse him for the utilities that he,
himself, pays. When the premises are rented, they are rented at a fixed rate,
"utilities included." If utility usage increases, a notice of rent increase to
cover the extra cost is in order. Most such arrangements involve month to month or other
periodic tenancies which permit such rent increases at modest cost in effort.
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