THE UTILITY COST CONUNDRUM
Now, let's talk about utility costs. It's no secret that utility bills can take a significant chunk out of a homeowner's budget. When an ADU is added to a property, the utility consumption naturally increases. This brings up a vital question: Who should be responsible for paying those additional utility costs? In some cases, homeowners might choose to include the utility costs for the ADU in the rental price. However, there's a more equitable and efficient way to handle this: Ratio Utility Billing.
UNDERSTANDING RATIO UTILITY BILLING (RUBS)
Ratio Utility Billing fairly distributes utility costs among multiple units on a property based on their usage. Instead of just passing on the entire utility bill to the ADU's Resident or incorporating the costs into the rent, RUBS considers the proportionate use of utilities by each unit, without the expense of submetering equipment and installation. Here's how it works: 1. The utility bill is divided between the primary residence and the ADU based on an algorithm. Typically, this is done by calculating the square footage and number of occupants in each unit. Each household pays only for the utilities they consume. 2. Utility recovery platforms like Livable do the heavy lifting on the calculations - all you need to do is provide basic information and let the system do the rest. 3. Livable also provides full transparency into utility use, giving Residents the opportunity to lower their bills through reducing consumption. Important note: Check your local laws. You may need to use submeters for some utilities depending on where you live. Even if you do need or choose to use submeters, a professional payment platform can help you manage payments and stay in compliance.
HOMEOWNERS MIGHT CHOOSE TO INCLUDE THE UTILITY COSTS FOR THE ADU IN THE RENTAL PRICE.
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