Attorney General Brian L. Schwalb today issued the below consumer alert and business advisory to inform landlords and tenants about the need for transparent and complete disclosures regarding utility billing in apartment buildings, especially as consumer costs continue to increase.

“Our office has received numerous complaints about landlords potentially overbilling residents for utilities or failing to make their billing practices clear,” said Attorney General Schwalb. “Tenants also routinely express confusion about how utility bills are allocated and struggle to budget because of inconsistent utility billing practices. While landlords have flexibility regarding how they bill residents for utilities, they must inform prospective tenants about these processes before a lease is signed. I strongly encourage all prospective renters to ask detailed questions about a property’s utility billing practices before signing a lease, and any District resident who believes they have been overcharged to reach out to my office.”
 

CONSUMER ALERT & BUSINESS ADVISORY

District renters, do you know how much you are paying for utilities?

The Office of the Attorney General (OAG) often hears from District residential tenants with questions about their leases, including questions about how tenants are billed for their utilities. This is especially true when the rental property uses a Ratio Utility Billing System or “RUBS” system for calculating utility fees. As with all lease terms, it is important for tenants to understand how RUBS works, and how RUBS will impact your monthly bills and budget, before you sign the lease. 

This alert provides basic information for both residential tenants and property owners about RUBS billing, along with tips and suggestions for tenants and property owners to help ensure that utility charges are clearly disclosed and easily understood.
 

Ratio Utility Billing System (RUBS)

A Ratio Utility Billing System (RUBS) is one method landlords in the District may use to calculate their tenants’ utility fees. Unlike systems that involve individual meters for each unit, RUBS allocation is not based on actual per-tenant usage for the utility. Rather, with RUBS billing, the landlord tracks the building’s total usage with a “master meter,” then subdivides the total bill among all tenants, using a formula.

There is no law or regulation that dictates the RUBS formula that a landlord or third-party utility billing company must use, and the RUBS billing formula can vary from property to property and by utility. The formulas, however, are usually based on some combination of: (1) the number of occupants in each unit, and (2) the square footage of each unit. Some RUBS formulas may also consider other factors, such as the number of bedrooms and bathrooms, or amenities like washing machines and fireplaces. In addition, RUBS formulas may also charge tenants for common area utility use, such as common area HVAC charges or common area water charges. Some properties that use RUBS billing also charge additional administrative or service fees. However, RUBS billing should not include charges for retail or non-residential spaces at the property, since residents receive no benefit from utilities used in those spaces.

RUBS billing can be confusing and, as a result, can generate utility bills that are higher than expected for some tenants. By law, however, RUBS billing should not be confusing. All RUBS billing disclosures should be made consistent with the D.C. Consumer Protection Procedures Act (CPPA), which requires that all fees, including utility fees and related utility billing fees, be disclosed and explained in a timely, prominent, and accurate manner. See D.C. Code § 28-3901, et seq.

Tips for Renters: Understanding Your Utility Bills

If you are a District tenant or a prospective tenant with questions or concerns about your utility bills, here are some suggestions to keep in mind at every stage of the leasing process:

Ask questions: If you are looking for an apartment or are in the process of renewing a lease, ask questions about how utilities are billed at the property before signing the lease. For example:

• Ask for a description of the specific billing method that is used to calculate each utility.
   
• Request to see past utility bills for the building for each utility (e.g., water, sewer, electric, gas, and trash) and, if possible, for the type of unit or the actual unit you are applying for. This will help you get a better understanding of the actual utility costs, including any common area utility fees or other common area charges for the property.
   
• Request to see the average monthly bill for all rental units in the property in the previous calendar year, by utility.
   
• Request information about any additional service charges or administrative fees paid by tenants for the operation and use of the RUBS system.
   
• Ask whether tenants have the right to inspect RUBS records or other related utility records kept by the property upon request.
   
• Ask how RUBS billing disputes, or tenant concerns with accurate RUBS billing, are resolved at the property.

Review your lease: If you are a current tenant and have already signed a lease, start by reviewing the current lease agreement. The lease or the lease utility addendum should state what utilities a tenant is responsible for and how those utilities are calculated, including any common area fees. The lease document should also explain any fees associated with the administration of RUBS services.

Request an explanation: If the explanation in your lease is unclear, ask your landlord or property manager for a detailed explanation of how utilities are calculated. Consider submitting a written request asking the bulleted questions in the “Ask Questions” section above. If the property is non-responsive to your requests, or if you do not understand the explanation provided, then call OAG’s Consumer Hotline at (202) 442-9828 or submit a consumer complaint to OAG for assistance.

Make sure your bill is accurate: If your utility bills seem high or increases from prior months without explanation, consider putting in a maintenance request through your building’s preferred method to make sure that the meter and/or the relevant equipment is properly functioning. Additionally, you can ask the landlord or property manager to confirm that your RUBS bill does not include any usage that should not be billed to residents (e.g., usage by a commercial tenant).

Reach out for help: If your building is non-responsive to your requests, OAG Mediation can try to help you get answers. Call the OAG Consumer Hotline at (202) 442-9828 or submit a consumer complaint online.

Tips for Multi-Unit Property Owners: Make Clear Disclosures

If you are a landlord or property owner that uses or is considering using a RUBS, you should ensure that your tenants understand how they will be billed for each utility, including any common area charges, at the tenant application stage and before the tenant signs the lease. Keep in mind that all residential RUBS billing disclosures should be made consistent with the CPPA, which requires that all fees be disclosed and explained in a timely, prominent, and accurate manner. See D.C. Code § 28-3901, et seq.

Here are some suggestions for avoiding potential billing disputes by ensuring that prospective and current tenants know how they will be billed:

At or before the rental application stage: Provide clear rental application disclosures to prospective tenants about how every utility is billed at your property, both for individual units and any common area/general usage utility fees. Consider providing this information prominently on your website, or in writing at a time before a tenant is required to pay a non-refundable rental application fee. For example, provide:

• A description of the specific billing method that is used to calculate each utility.
   
• Copies of past utility bills for the building for each utility (e.g., water, sewer, electric, gas, and trash), as well as past utility bills for the type of unit, or actual unit, that the tenant is applying for, so the tenant understands the actual utility costs, including any common area utility fees or other common area charges for the property.
   
• Information on the average monthly bill for all rental units in the property in the previous calendar year, by utility.
   
• Clear disclosures about any additional service charges or administrative fees billed to tenants for the operation/use of the RUBS system, and what specifically these additional charges are for.
   
• Information on how tenants can inspect RUBS records or other related utility records kept by the property.
   
• Details about how RUBS billing disputes, or tenant concerns with accurate billing, are resolved at the property.

At the leasing stage: Ensure that the lease language—and any related lease addendums—clearly disclose how utilities are billed to tenants, including any common area utilities and administrative or service fees, for each utility. For example:

• Include the specific RUBS billing method calculation for each utility in the lease.
   
• Make sure that the purpose for any fees associated with third-party utility billing providers is clearly disclosed to tenants in a way that is easily understood.
   
• Include a description of how tenants can get help with any RUBS billing questions or concerns.
   

For current tenants: If tenants have questions about their RUBS bills, timely address those concerns. For example:

• Verify that all utility meters, submeters, and other relevant equipment is properly functioning and accurately calculating utility usage rates.
   
• Have clear protocols and procedures in place to routinely monitor and check the RUBS and related utility equipment and share those protocols and procedures with tenants.
   
• Make sure that tenants are billed appropriately, and that any commercial use or other non-tenant utility usage is not included in the tenant utility bills.

Get help and guidance: If you are a small landlord or business owner and need legal advice, you can reach out to the DC Bar Small Business Legal Assistance Program for help at npsb@dcbar.org.

Consumer Resources — Get Free Help!

• Call OAG’s Consumer Protection Hotline at (202) 442-9828.
• Email at consumer.protection@dc.gov.
• Submit a consumer complaint online at oag.dc.gov/complaint