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Updated about 4 years ago on . Most recent reply

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Quinn Zerfas
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Can Tenants Audit RUBS calculations/charges?

Quinn Zerfas
Posted
I'm curious what recourse a tenant would have to make sure they aren't getting screwed over by their buildings RUBS. Based on the way the property manager described the way they bill, it is a blanket and arbitrary system. 1 bed - $60/2 bed - $80/3 bed - $100. I might be recalling the 2bd/3bd rates incorrectly, but in my one bed it is $60 flat. I fully suspect that regardless of how many people live in a unit, the price is determined on the unit size. (Please also note this is only for water. There is no gas). Which of course means that the couple in the one bedroom across the hall would be paying the same amount as me for two people. Also, just doing some quick math on the number of units (64) to what they are taking in each month, I suspect there could be over-billing for profit on the landlords part. So my questions are:

1. Is there regulated formulas a building has to follow for water RUBS? Or is it perfectly legal for them to be lazy and make an arbitrary tier system based on unit size and not occupants?

2. If the answer to question 1 is that the tier system is legal. Is the building allowed to profit off this? Say their calculation brings in $5k a month and the bills only amount to $4k. Is there recourse for the building to prove it is not profiting off this if it is illegal to profit off RUBS?

Other facts: Only (6) washing machines in the entire building. There is very minimal landscaping and most of it is succulents or dirt covered areas with dry bark. No common areas that use water. No pool/jacuzzi/water fountain/etc...

Thanks in advance for the help & input!

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Greg Scott
#3 General Real Estate Investing Contributor
  • Rental Property Investor
  • SE Michigan
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Greg Scott
#3 General Real Estate Investing Contributor
  • Rental Property Investor
  • SE Michigan
Replied

Quinn:

A true RUBS (variable cost monthly depending on usage) must comply with local ordinances and typically can recover only a portion (e.g. 80%) of the utilities. Some landlords will push that and your local government should provide methods for auditing.

A flat fee system is perfectly legal if written as such in your lease and it doesn't matter if the collections exceed the costs.  If the costs were not documented in your lease, you may have a justified gripe.  If it was in the details and you simply did not read your lease before signing, call it a lesson learned.

  • Greg Scott
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