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Updated over 3 years ago on . Most recent reply

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ADU in Los Angeles area - how to split utility bills?

Michael Schnyder
Posted

I'm having an ADU built from a detached garage which will be a 2/1, approx. 750 sf. The single family house is a 3/2 approx. 1200 sf.
The utilities are LADWP and gas, both properties would be on the same shared meters. 

Would love to get suggestions from those of you in the LA area on what would be the best way to split the utility bills?

Thanks~

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Dan H.
#4 General Real Estate Investing Contributor
  • Investor
  • Poway, CA
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Dan H.
#4 General Real Estate Investing Contributor
  • Investor
  • Poway, CA
Replied
Originally posted by @Michael Schnyder:

@Matthew Forrest That's what my contractor suggested to split the bill approx. 60/40. My concern would be if lets say the ADU which would be paying 40% leaves the water running and the bill drastically goes up from one billing cycle to the next. The front house then says they didn't use the increased amount and shouldn't have to pay so much more.
What do I do in that case?  If could also because an issue with the house and ADU tenants, right?  

 We have multiple properties with a shared water meter that has each unit paying based on a percent of the bill that we disclose at initial lease. 

We occasionally get a complaint about it not being fair.  It usually only happens once because we basically give the same response 1) it is what was agreed to in their lease 2) their lease is up at so-and-so date and they are free to find other housing at that time.  

We have been fair for items that are not in the tenants’ control such as extra water costs associated with slab leaks, etc.  Under those rare conditions, we charge the tenant based on their historical consumption and we pick up the overage and consider it just another of the miscellaneous expenses that are so often left out of pro formas (our pro formas have a miscellaneous expense for rare items like this). 

good luck

  • Dan H.
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