LEGAL ASPECTS Q&A RATIO UTILITY BILLING
In June, attorney John List and Livable’s Annette Gallagher presented a webinar to AAOA on the legal aspects of Ratio Utility Billing (RUBS). They discussed the basics of Ratio Utility Billing and provided information for property owners looking to start billing tenants for utilities using ratio billing. Attendees were polled about whether or not they include utilities with rent at this time. About 40% said they do.
It’s important to get started recovering utilities from residents as much as possible for a few reasons:
• Ratio Utility Billing provides residents with accountability for their use, driving conservation behaviors and saving housing providers money on utilities overall. We are firm believers that if you tie a tenant’s consumption to their wallet, they’re going to use less. The majority of Housing Providers have historically absorbed the rising cost of utilities. With RUBS, you can finally share accountability with your tenants in a fair and accurate way.
• In many markets in the United States, utility bills are rising at faster rates than rent can be increased to accommodate them.
• Billing for utilities increases your net operating income and the value of your property over time.
• Rent control is becoming more popular in many areas, and that can limit your ability to begin ratio billing. Housing providers who are already enrolled in ratio utility billing are often grandfathered in under rent control provisions, but starting after one is passed can be much more difficult.
John List covered these and other aspects of RUBS on the webinar, including a lease addendum for RUBS that is available to AAOA members.
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