Separating Utilities for a Multi-Unit Building

[Brynn Misener]

Hello Everyone! 

Does anyone has experience with separating utilities in a multi-unit building - specifically heat? I manage a 6 unit building that has one commercial gas bill and we would like to have tenants pay for their own heat. Suggestions on first steps would be greatly appreciated!

[Michael Seeker]

Hey @Brynn Misener - I've separated heat out on a number of buildings and it has always been part of a complete building remodel.

Unless you are planning to vacate the building and add new systems, the best approach is probably to just implement a RUB system where you pay the bill and require each unit to pay a portion of it.  While I'm not a huge fan of this approach, it's cheap or free and very easy to implement.

Assuming you do not have anything in the current leases, as each lease expires, you can add a clause/addendum requiring the tenant to pay x% of the bill each month.  If all of the units are the same, you can just use 1/6th.  If you have a wide variety, then you can do it using square footage.