Phil Querin Q&A: More Questions on Water Sub-Metering

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February 20, 2014

Question: I have been investigating the process and costs involved with installing submeters at my 180-space community and converting to a 'submeter billing method'. At the same time as the submeter conversion, I want begin billing for common area fees and utility bills under a 'pro rata billing method'. As far as I understand, that scenario is covered in the statutes. Here is my dilemma: The local municipality doesn't charge much of anything for actual water usage...it ends up only being about $6 per month/per space to pay for all water usage in the community. The way the city gets their money is by constantly adding and increasing 'utility fees' like storm drain, public safety, etc. After running my numbers, I am beginning to question why I even want to go to the expense of installing water meters at all, because if it just ends up raising the monthly out-of-pocket cost for my senior residents, and even If they reduce their water usage significantly, they will only be able to realistically save a dollar or two per month. What I would like to do instead is just begin a 'pro rata billing method' for my community electricity, garbage, natural gas and city utility fees. I would obviously offset their rent amount commensurate with the previous 12 months' total bills. What I cannot figure out after reading the statutes is this: Can I begin a pro rata billing method for the above mentioned items, with 180 days' written notice, WITHOUT converting to a submeter billing method at the same time?

Answer: ORS 90.532 (3) provides as follows: Except as allowed by subsection (2) of this section for rental agreements entered into on or after January 1, 2010, a landlord and tenant may not amend a rental agreement to convert water or sewer utility and service billing from a method described in subsection (1)(b)(C)(i) [i.e. where the charge is included in the base rent] *** to a method described in subsection (1)(b)(C)(ii) [i.e. where the charge is billed separately from base rent and apportioned among the tenants on a pro rata basis as measured by a master meter]. The exception covered in subsection ORS 90.532(2) provides as follows: A landlord may not use a separately charged pro rata apportionment billing method: (a) For water service, if the rental agreement for the dwelling unit was entered into on or after January 1, 2010, unless the landlord was using a separately charged pro rata apportionment billing method for all tenants in the facility immediately before January 1, 2010. (b) For sewer service, if it is measured by consumption of water and the rental agreement was entered into on or after January 1, 2010, unless the landlord was using a separately charged pro rata apportionment billing method for all tenants in the facility immediately before January 1, 2010. Translating this to plain English, here is my take: • For rental agreements entered into on or after January 1, 2010 you may not convert water or sewer charges from an in-rent method to a pro rata billing method except as follows: o Water service: If the rental agreement was entered into on or after January 1, 2010, unless you were using a separately charged pro rata apportionment billing method for all 180 spaces immediately before January 1, 2010. o Sewer Service: If sewer service is measured by consumption of water and the rental agreement was entered into on or after January 1, 2010, you may not convert from an in-rent method to a pro rata method, unless you were already using a separately charged pro rata apportionment billing method for all 180 spaces immediately before January 1, 2010. • Garbage service: You may not convert from an in-rent method to a pro rata billing method unless the pro rata apportionment is based upon the number and size of the garbage receptacles used by the tenant. There does not appear to be any time frame limitation on this rule Pursuant to ORS 90.534 [Allocated charges for utility or service provided directly to space or common area], if a written rental agreement so provides, you may use a pro rata billing method with a master meter and require tenants to pay you a utility or service charges (e.g. electrical and natural gas) that has been billed to you or provided directly to the tenant’s space or to a common area. However, you may not unilaterally amend an existing rental agreement to convert utility and service billing from an in-rent billing method to a pro rata billing method. It appears you could use the pro rata billing method (other than sewer and water) per above rules, only on a going forward basis with new residents. Conclusion. This is the best I can tell you. It is not legal advice, and based only upon my interpretation of the statutes which are quite complex. It appears that yours is a difficult situation in which water/sewer submetering will not actually help. With the exception of garbage service, there is no easy answer. However, upon closer evaluation by your attorney, perhaps you may be able to figure out a work-around solution. Good luck!