Landlord Question and Answer Forum

I just bought a duplex with a shared gas meter so need to put gas in my name. Gas costs are widely variable, so I don't want to unnecessarily inflate the rent to cover higher usage patterns. Instead, I want to charge for actual cost of gas as a separate monthly fee in addition to the tenants static rent. To do this, I planned to split the monthly bill by some formula...there's a 1 bed and 2 bed appt, so I was thinking 50% of bill divided by number of persons and 50% divided by square footage. Then I would just bill the tenant this variable amount each month, to be paid with their next months rent. That way we're covered, and the tenants only pay for what they use. Question is, is it legal to pass on these gas charges in this way, or do I have to include them in the amount I charge for monthly rent?

Yes but you will want to have it stated in your lease so that the tenant understands and can agree to the terms of the lease. You will also want the utilities to have separate gauges and digital read outs to be able to bill all tenants accurately.

Posted by Susan P, CA on Sunday, May 17, 2015

Thanks you for your reply. You mention, having "separate gauges and digital read outs". We cannot do this at present. A single Gas meter is currently shared between the 2 units, so we have no way of knowing exactly how much gas each unit is using. However, we have clearly stated, in an addendum to the lease, exactly how the monthly gas bill will be prorated between the 2 apartments. I pasted in the full proposed text below, but in summary, 50% of bill will be divided by number of persons and 50% by square footage. So is this still OK - we are essentially estimating how much each unit uses, and clearly stating our calculation methods in the lease. Can we do this? Note: We do plan to look into longer term solutions with the gas company, either creating a separate meter, or such like, but the laundry is shared so there's not an immediate solution and we need to have something in place within the next week as we will be getting new tenants. ----> Proposed wording in our lease addendum: Tenant(s) acknowledge that the gas has a shared meter and as such is billed to the landlord. However, tenants are solely responsible for all gas charges incurred and will be billed monthly by the landlord for usage from the prior month. 50% of the charges will be prorated based on square footage and 50% based on number of persons. The calculation will be as follows: a. 50% of the PG&E monthly charges will be based upon the number of persons occupying the upper and lower units at any one time. For example if there are 2 people occupying the upper unit, and 1 person occupying the lower unit, two thirds of this portion of the bill will be met by the upper unit and one third by the lower unit. b. 50% of the PG&E monthly cost will be based upon relative square footage of each unit. The Upper unit will be responsible for 60% of this this portion of the bill, and the lower unit for 40%.

Posted by Maria Q, CA on Sunday, May 17, 2015

Thanks you for your reply. You mention, having "separate gauges and digital read outs". We cannot do this at present. A single Gas meter is currently shared between the 2 units, so we have no way of knowing exactly how much gas each unit is using. However, we have clearly stated, in an addendum to the lease, exactly how the monthly gas bill will be prorated between the 2 apartments. I pasted in the full proposed text below, but in summary, 50% of bill will be divided by number of persons and 50% by square footage. So is this still OK - we are essentially estimating how much each unit uses, and clearly stating our calculation methods in the lease. Can we do this? Note: We do plan to look into longer term solutions with the gas company, either creating a separate meter, or such like, but the laundry is shared so there's not an immediate solution and we need to have something in place within the next week as we will be getting new tenants. ----> Proposed wording in our lease addendum: Tenant(s) acknowledge that the gas has a shared meter and as such is billed to the landlord. However, tenants are solely responsible for all gas charges incurred and will be billed monthly by the landlord for usage from the prior month. 50% of the charges will be prorated based on square footage and 50% based on number of persons. The calculation will be as follows: a. 50% of the PG&E monthly charges will be based upon the number of persons occupying the upper and lower units at any one time. For example if there are 2 people occupying the upper unit, and 1 person occupying the lower unit, two thirds of this portion of the bill will be met by the upper unit and one third by the lower unit. b. 50% of the PG&E monthly cost will be based upon relative square footage of each unit. The Upper unit will be responsible for 60% of this this portion of the bill, and the lower unit for 40%.

Posted by Maria Q, CA on Sunday, May 17, 2015