Ratio Utility Billing Systems Legal If Implemented before 2018
On Sept. 29, 2016, Gov. Jerry Brown signed SB 7 into law in California. Brown’s action brought to a close a process that spanned a decade and ushered in a host of legal requirements for utility management in the state. Soon, newly constructed apartment buildings must be metered for the billing of residents’ water usage.
Members of the industry and RealPage worked closely with legislators to ensure the interests of the multifamily industry were represented and protected.
Though the legislation takes effect in California in 2018, prudent owners and managers nationwide should consider the following five points as they plan their future budgets and strategies.
1. When does the law apply? The law applies to apartment buildings that request a connection to a water utility after Jan. 1, 2018. Properties that request the connection prior to the effective date are not required to install meters--but can if desired.
2. What if new units are added to an existing building that is not subject to the law? If the property was built before the law takes effect, additional new units will not trigger an obligation to retrofit the building with submeters.
3. Does the law apply to student or low income housing? The law does not apply to student housing. If at least ninety percent of a community contains low income units, then the property is exempt from the mandate to submeter. A state agency has the ability to add new categories of exemptions during the next two years.
4. Are ratio utility billing systems (RUBS) for water legal under the new law? The law allows for any existing RUBS programs to continue after the legislation takes effect. However, an owner may not institute a new RUBS program after Jan. 1, 2018.
5. Important: Consider instituting a RUBS program for water now to ensure its legality in the future: Owners should institute RUBS programs now to ensure their legality after the law takes effect on January 1, 2018. Initiating a RUBS program takes time--often lease language must be updated to allow for the billing of residents. Implementation of the new lease language may be possible only for new residents or upon renewal--so act quickly.
Michael Semko is Vice President, Legal for RealPage, Inc. and advises the company on corporate and regulatory issues related to multifamily utility management. Semko came to RealPage through the acquisition of NWP Services Corporation where he served in a similar role. Prior to NWP, he was Vice President and Legal Counsel to NAA for nearly a decade.