Submetering Electric in a Nonconforming Unit

[Art Maydan]

Hey everyone,

I manage a 7-unit building with a nonconforming basement unit pulling power from the common/basement meter. The owner would like to get the tenants to pay their own electric. I had two electricians take a look and they say ComEd does mandatory inspections now before adding a meter and would make us upgrade our current 200amp service if we try pulling a permit for a new meter. They're saying it would be $10K-$30K for all the work involved. And then there's the issue of the unit itself being nonconforming. It obviously doesn't make sense at that point and I'd just advise the landlord to bump rent if it's a big deal. Although I would personally just leave it alone as we're already at market and nobody reads the listing text.

I remember hearing about some third-party submetering providers on the BP podcast years ago. Anyone have experience with these? Any other options I'm not considering?

Thanks a lot,
Artem

[Frank Chin]

Quote from @Art Maydan:

Hey everyone,

I manage a 7-unit building with a nonconforming basement unit pulling power from the common/basement meter. The owner would like to get the tenants to pay their own electric. I had two electricians take a look and they say ComEd does mandatory inspections now before adding a meter and would make us upgrade our current 200amp service if we try pulling a permit for a new meter. They're saying it would be $10K-$30K for all the work involved. And then there's the issue of the unit itself being nonconforming. It obviously doesn't make sense at that point and I'd just advise the landlord to bump rent if it's a big deal. Although I would personally just leave it alone as we're already at market and nobody reads the listing text.

I remember hearing about some third-party submetering providers on the BP podcast years ago. Anyone have experience with these? Any other options I'm not considering?

Thanks a lot,
Artem

I owned duplexes in NYC with additional with units with no CO. I also looked into 4plexes and 5plexes so constructed, with an additional basement unit with no CO. All of them have an additional meter to run the building, i.e. the furnace, hallway lights, laundry rooms if any. The illegal units are all attached to this additional landlord meter.

When I started REI, I had licensed electricians tell me that to obtain an additional meter, the unit would have to have a legitimate CO, the building department has to come by to take a look. Up till now it is impossible to obtain additional CO's for these buildings. But given the housing shortage, things might change, though it's unlikely.

I looked into submetering, but it's not cost effective due to wiring issues. Most of the time, owners just add $30 to the rent, but not much more, since collecting rents from these units are illegal. The other issue if another tenant is behind on the rent, you try to evict, a legal aid lawyer would insist that the illegal tenant in the illegal unit must be evicted first, due to landlord having unclean hands, and the court would usually agree. That's to punish greedy landlords and imagine if you spent a ton of money submetering and wiring and the legal aid lawyer would get a nice kick out of your double misfortune.