In Practice
If you manage a community where the owner pays one water bill for the whole building, you may hear about RUBS in real estate meetings. A ratio utility billing system splits that bill among residents using a formula, commonly based on things like unit square footage, number of occupants, bedrooms or a mix. Each resident gets a charge on their ledger, often through a third-party billing company the owner hires.
Day to day, the manager's job is to explain it clearly. The lease or an addendum should spell out which utilities are billed, how the split is figured and how often. Residents ask why their bill changed, so you need a plain answer: the building bill rose, occupancy changed, or the formula weights something differently. You also handle disputes and make sure charges post to the right unit.
An example: if the building's water and sewer bill is 10,000 dollars and the formula assigns one apartment 1.5 percent of the total, that resident is billed 150 dollars before any admin fee. Numbers here are only an illustration.
A common mistake is not disclosing the method up front or changing it mid-lease without proper notice. Rules about utility billing, allowed fees and required disclosures vary by state and sometimes by city, so check local law and your company's policy before setting up or changing a program. RUBS is not the same as submetering, which bills from actual measured use.
How a RUBS bill is figured
Resident charge = the building's utility bill times that unit's share under the formula (for example, a weighted mix of square footage and occupants). Example only: 10,000 dollars times a 1.5 percent share equals 150 dollars.
Not to Be Confused With
RUBS is one method of billing utilities. Utility reimbursement is the broader idea of residents paying the property back for utilities, however it is calculated.
Ratio Utility Billing System: Common Questions
What is the difference between RUBS and submetering?
RUBS allocates the building bill by formula. Submetering measures each unit's actual use and bills for it.
Is RUBS legal?
It is allowed in many places, but rules differ by state and city, including disclosure and what you can charge. Check local law and the lease addendum requirements.
