Academy/Utilities & Infrastructure
Submetering
One meter behind the meter, one bill that finally matches one unit's actual use.
Submetering means installing a meter behind the property's master meter so each unit is billed for its own measured water use, instead of splitting one bill by square footage or a flat share. Texas and California both regulate submetering by statute, but the details, cost caps, what a vendor may add on top, and disclosure duties, are set state by state. Check your own state's statute before signing a submetering contract.
Submetering versus the alternatives
Most associations that do not have direct utility accounts for each unit get one bill at a master meter and have to divide it somehow. There are two common ways to divide it. Submetering installs a second meter behind the master meter for each unit, so the bill is based on that unit's own measured use. Ratio utility billing (sometimes called RUBS) skips the extra meters and allocates the master bill by a formula instead, commonly square footage or occupancy.
Submetering costs more upfront, meters and installation, but ties the bill to actual behavior. Ratio billing is cheaper to set up but can charge a one-person unit the same as a four-person unit next door if the formula does not account for occupancy. Neither approach is universally required or banned; whether your state permits either, and under what conditions, is a statute you need to read, not something to assume from a neighboring association's practice.
What the law actually controls
States that regulate submetering typically cap what can be added on top of the actual utility cost and require the billing method to be disclosed in writing; check your own state's statute, since the caps and requirements are not uniform. Texas is one of the more detailed examples. An owner who submeters water may not charge a resident more than the utility actually charged for that water.
"May not impose on the tenant any extra charges, over and above the cost per gallon and any other applicable taxes and surcharges that are charged by the retail public utility."
Source: Texas Water Code 13.503(b), Texas Legislature
Texas does allow one add-on: an administrative service charge, but it is capped.
"A service charge of not more than nine percent of the costs related to submetering allocated to each submetered rental or dwelling unit."
Source: Texas Water Code 13.503(c), Texas Legislature
That nine percent figure is a Texas number, not a national default. California's submetering statute states its purpose as water conservation and fairness to both tenants and landlords, but its specific cost caps and billing mechanics are a separate question from Texas's; do not import Texas's nine percent, or any other state's cap, into a different state's contract.
The gap nobody has a standard formula for
Even a well-run submetering program rarely balances perfectly. The master meter almost always reads a little higher than the sum of every submeter, because of measurement variance, minor leaks, and common-area use. No state statute researched for this course, in Texas, Florida, or California, specifies a required formula for allocating that gap among owners. Do not let a vendor hand you a percentage split and call it standard practice; ask what statute or public utility commission rule it is based on, and if there is none, have counsel or the billing vendor put a written methodology in front of the board before anyone gets charged for it.
Texas does require one related disclosure even for non-submetered, ratio-based billing: the method of calculation has to be written down and given to the resident, and the amount billed cannot exceed what the utility actually charged.
"An owner or condominium manager may not impose additional charges on a tenant in excess of the actual charges imposed on the owner."
Source: Texas Water Code 13.5031, Texas Legislature
Check yourself
Answer before you read the explanation, recalling it is what makes it stick.
Your Texas HOA submeters water. The billing vendor wants to add a $40 monthly service charge per unit to cover overhead. What's true?
An association uses a square footage ratio to allocate a master water bill instead of submeters. What does Texas law require of that arrangement?
The master meter shows 20,000 more gallons than all submeters combined this month. What should the board do first?
Sources
- Texas Water Code 13.503, Submetering, Texas Legislature
- Texas Water Code 13.5031, Nonsubmetering Rules, Texas Legislature
- California Civil Code 1954.201, Submetering Legislative Findings, California Legislative Information, mirrored at FindLaw
Utilities & Infrastructure
Next, see how the master meter to submeter gap gets handled once it shows up on a bill: Water-loss allocation.
Whether submetering or ratio billing is even permitted, what caps and disclosures apply, and how to allocate the gap between the master meter and submeters all vary by state. Read your own state's submetering statute before adopting or changing a billing method.