FAQs

FAQs

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1. What is utility submetering, and is it legal in Texas?

Submetered utility service is utility service that is master metered for the owner, and the owner has installed a submeter or point-of-use submeter for each dwelling unit to measure each tenant’s utility use. Owners may submeter for electric service. Apartment, condo, and manufactured home communities built after January 1, 2003 are required to use individual water submeters to measure a dwelling unit’s water consumption. Our firm helps you navigate statutes and regulations to ensure your system is compliant.

2. Can a landlord charge more for utilities than the actual cost?

No. Similar to many states, Texas does not allow a property to make a profit from billing utility services to tenants. You are, however, allowed to collect a small administrative fee for water submetering. Overcharging tenants can lead to tenant complaints, significant administrative penalties, and in some cases, forfeiture of one month’s rent. In addition, overcharging for electricity could lead to charges of acting as a retail seller of electricity without a certificate.

3. What is the difference between submetering and allocated billing or RUBS?

Submetering relies on hardware to measure exact utility usage in a dwelling unit. Allocated billing, also known as Ratio Utility Billing Systems (RUBS), uses a mathematical formula (based on square footage,occupancy, or both) to allocate costs. Because allocated billing is more scrutinized by the PUC, it requires precise lease disclosures and adherence to specific state formulas.

4. What should I do if a tenant requests billing information?

Under Texas law, the tenant has the right to review billing information to determine the accuracy of the utility bills they receive from the property. PUC rules require owners to make certain records available to its tenants for inspection at the manager’s office during normal business hours. Failure to provide billing information to the tenant is, in and of itself, a violation — even if all the billing was done correctly and the invoices have all the required information on them. Seek legal counsel to determine what should be provided to the tenant and how far back the record retention regulations reach.

5. What should I do if a tenant files a PUC complaint against me?

Immediate action is required. The Public Utility Commission of Texas has the power to audit your records and levy administrative penalties. You should preserve all billing data, review your lease agreements, and seek legal counsel to draft a formal response to the Commission.

6. Are landlords responsible for submeters on a property?

Yes, the property owner is responsible for installing, maintaining, and testing all submeters on the property. If a tenant asks for a meter test in writing, the owner must do either one of two things at no charge to the tenant: provide evidence that the meter was calibrated or tested and shown to be accurate within the preceding 24 months; or have the meter tested. We help clarify testing standards, meter record requirements, and permissible charges to tenants for additional testing.

7. How can I defend against a utility overcharge lawsuit?

Defense often hinges on a “Regulatory Audit.” The firm will examine your billing history against the applicable utility rates and state laws to prove that charges were calculated accurately. Proactive compliance audits are the best way to prevent these lawsuits before they begin.

8. Do I need to register with the Public Utility Commission (PUC)?

For electricity, you are not required to register with the PUC. For water/wastewater, an owner who intends to bill tenants for either submetered or allocated water/wastewater service is required to register with the PUCT and report any changes to the methodology used to bill tenants.

9. Can I shut off utilities if a tenant fails to pay their utility bill?

Disconnection is generally not advised and may be done only in very specific circumstances. Do not disconnect utility services to tenants without seeking legal advice prior to doing so. Utility payment disputes are better handled through the eviction process or civil collection processes.

10. What are "administrative fees" in utility billing?

Administrative fees cover the cost of reading meters and generating invoices. A manufactured home rental community or apartment house may charge a service charge for submetering water/wastewater service in an amount not to exceed a certain level set by law.
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