RENT Magazine Q3 '24

Q:

Can I make a profit off the utilities my residents use?

Do we have to give residents notice before we start billing them for utilities using RUBS? a profit, you’re now potentially a utility provider in the eyes of the state. That comes with potentially costly regulations you’ll have to abide by, such as water quality testing. Not unless you want to risk being regulated as a utility provider. If you’re just recovering your costs plus any “defensible fees” such as late fees, ACH fees, platform fees, etc., then you’re within your rights as a housing provider. When you move past those guardrails to make Yes. That’s why AAOA provides you with a lease addendum you can give your residents. Many municipalities today require that RUBS can ONLY begin on lease inception or renewal. Check with your local attorney to find out when you can start to bill and how much notice you must provide ahead of time. Can we back charge past residents for utility charges from their past occupancy? Check with your attorney. It depends on where you are, but if they’re no longer your tenants and they weren’t supposed to pay them separately, that could be difficult to justify. If you have a small multi-unit building, can you add one unit at a time as residents turn over? Yes. Again, check with your local attorney to make sure you’re maximizing your earning opportunity while staying in compliance with regulations and ordinances.

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