How-to MeterEase blog

How to add a RUBS clause to your lease

By MeterEase · Published October 15, 2026

A ratio utility billing system (RUBS) lets you split a master utility bill among tenants by a formula. The formula only works if the lease says tenants pay it and explains how it is figured. This post covers what that lease language usually addresses, gives an outline you can take to your attorney, and explains how to bring current tenants onto it.

This is general information, not legal advice. Lease law is state and local, and some states regulate utility allocation directly. Have a lawyer licensed where the property sits review your final wording.

Why the clause matters

Without a clause, a tenant has no obligation to pay a share of a utility you are billed for. With a vague clause (“tenant pays a share of utilities”), you invite disputes over what “share” means. A good clause turns each monthly bill into simple arithmetic both sides agreed to in advance.

Check your state first

Some states have specific rules. A few examples from our research:

Texas has rules on submetering and allocating water in apartment houses, and which properties they cover. See the Texas Administrative Code sections in the sources below and our Texas guide.
North Carolina addresses landlord water billing by statute and through its Utilities Commission, which limits formula-based water billing in some property types. See our North Carolina guide.
Arizona has a statute on charging tenants for utilities by ratio. See our Arizona guide.

We also have guides for California, Florida, Georgia, Nevada and New York, and a hub page listing them all. Where we found no clear statewide rule, those pages say so. Cities and water utilities can add their own rules, so check locally too.

What a RUBS clause usually covers

Most well-drafted clauses answer the same questions. Think of these as a checklist.

Which utilities. Name them: water, sewer, trash, gas, electric, stormwater. If a utility is included in rent, say that too.
The method. Square footage, number of occupants, bedrooms, fixed percentages, or a blend. If a blend, give the weights.
The inputs. The unit’s square footage or bedroom count, or how occupants are counted (for example, everyone listed on the lease, and guests staying longer than a set number of days).
What is passed through. The full bill, usage only, or usage plus fixed charges. Whether late fees are excluded.
Vacant units. Whether the owner pays the vacant unit’s share or it is split among occupied units.
Partial months. How move-in and move-out periods are prorated (usually by days in the billing period).
Billing and payment. How often, how the tenant is notified, when payment is due, and how it is paid.
Records. That the tenant can see the master bill and the calculation on request, or that a copy comes with each bill.
Changes. How much notice you give before changing the method, and that changes happen at renewal or with written agreement.
Admin fees. If you charge one, state it. Some jurisdictions limit them, so check before adding one.

An outline to discuss with your attorney

Here is an example structure, not finished lease language:

Utilities. Tenant will pay a share of the following utilities billed to Landlord for the Property: [water, sewer, trash]. [Electric and gas are paid by Tenant directly to the provider.]

Allocation method. Tenant’s share is [the Unit’s square footage, ___ sq ft, divided by the total square footage of all units, ___ sq ft] multiplied by the amount billed for the period, excluding late fees.

Vacancies. Landlord pays the share of any vacant unit.

Partial periods. For any period Tenant does not occupy the Unit for the full billing period, Tenant’s share is prorated by days.

Billing. Landlord will send Tenant a statement showing the billing period, total bill, method, Tenant’s share and the calculation, with a copy of the provider’s bill. Payment is due [__ days] after the statement is sent.

Changes. Landlord will give at least [__ days] written notice before changing the allocation method, effective no earlier than [lease renewal].

Your attorney may change all of this, and that is the point of having one review it.

Rolling it out to current tenants

You generally cannot add a new charge to a lease mid-term just by announcing it. Common approaches:

At renewal. Add the clause to the renewal lease and give notice well in advance. This is the cleanest path.
New tenants first. Put the clause in every new lease and leave current tenants on their existing terms until renewal.
Rent adjustment. Some landlords lower rent slightly when they start bill-backs, so the tenant sees the change as a shift, not a pure increase.

Give tenants a plain-English letter that explains the change, the method and an example. We wrote a separate post with a template: how to tell tenants you’re starting utility bill-backs.

Show the math every month

The clause sets the rules. The monthly statement proves you followed them. Each statement should show the bill total, the method, the tenant’s input (600 of 3,000 sq ft), the arithmetic, and the source bill. The tenant utility bill template and the bill-back letter generator can help, and the RUBS calculator lets you test the method before you put it in a lease.

Common mistakes

Leaving the method open. “A fair share” invites a dispute. Name the formula.
Counting occupants without a rule. Say who counts and when the count updates.
Forgetting vacancies. Decide before your first empty month, not during it.
Not checking local rules. A clause that conflicts with state law may not be enforceable.
Changing methods quietly. Give written notice, and change at renewal.

Where MeterEase fits

MeterEase is a math and delivery tool. You choose the method and own the lease; MeterEase applies the method you set, handles vacancies and partial months the way you choose, and emails each tenant their share with the math shown and the bill attached. It does not write leases or give legal advice. See how it works or pricing.

Split the bill and email every tenant in minutes

MeterEase reads the master bill PDF, applies your method and vacancy rule, and emails each tenant their share with the math shown and the source bill attached, after you check the numbers. Plans start at $14/month.

Sources

Example numbers in this post are made up to show the math. This post is general information, not legal advice; rules differ by state, city and utility. Check your lease and local rules.