Tenant communication MeterEase blog
How to tell tenants you're starting utility bill-backs
Starting utility bill-backs changes what tenants pay each month, so how you announce it matters as much as the math. A clear, early, specific notice heads off most of the pushback. A surprise line item on the rent ledger invites it.
This post covers when to tell tenants, what to include, and a letter template you can adapt. This is general information, not legal advice. Notice requirements and what you can change mid-lease depend on your state, your city and your lease.
Get the groundwork done first
Before you write the letter, make sure you have:
- A lease basis. For current tenants, that usually means the change starts at renewal or with a signed lease amendment. A tenant whose lease says “water included” cannot be billed just because you sent a letter. See how to add a RUBS clause to your lease.
- A checked method. You know which utilities, the formula, the vacancy rule and how partial months work.
- Local rules checked. Start with our state guides, then check your city and utility.
- An example for each unit. Run a recent bill through the RUBS calculator so each tenant can see a realistic number.
When to tell them
Give as much notice as you reasonably can, and at least what your lease and local law require for changes at renewal. Many landlords send the letter with the renewal offer, so the tenant can weigh the whole package at once. For new tenants, put it in the listing and walk through it at lease signing.
What to include
- What is changing and when. Which utilities, and the first billing period.
- Why. One or two honest sentences. “Water and sewer costs for the building have risen, and billing them by use is fairer than raising everyone’s rent by the same amount” works better than a long justification.
- The method. One sentence, plus the tenant’s own input (“your unit is 850 of 3,400 sq ft, or 25%”).
- An example. A recent bill, split with their actual share.
- What they will receive each month. The statement, the math, and a copy of the bill.
- Vacancies. That you pay the share of any empty unit (if that is your rule).
- How to pay, and when.
- How to ask questions.
- Any rent change. If you are lowering rent alongside the change, say so up front.
Keep it to one page. Avoid jargon; if you use “RUBS,” define it.
Letter template
Copy and adapt this. Replace everything in brackets. Have your attorney review it if you are unsure about notice rules where you own.
[Date]
Dear [Tenant name],
I’m writing to let you know about a change to how water, sewer and trash will be handled at [property address], starting with the billing period that begins [date], which is [when your renewal lease begins / as described in your new lease].
What’s changing. The building has one water meter, so the utility sends one bill for all units. Today that cost is included in rent. Starting [date], each unit will pay a share of the actual bill each month.
How your share is figured. Shares are based on [square footage]. Your unit is [850] of the building’s [3,400] square feet, so your share is [25%] of each bill. Late fees are never passed on. If a unit is vacant, I pay that unit’s share.
An example. The [month] bill was [$480]. Your share would have been [850 ÷ 3,400 × $480 = $120].
[Rent. At the same time, your monthly rent will [decrease by $__ / stay at $__].]
What you’ll get each month. A statement showing the bill total, the billing period, your share and the math, with a copy of the utility bill. Payment will be due [__ days] after the statement, by [payment method].
Saving on your share. Because the bill is shared, fixing leaks helps everyone. Please report running toilets or dripping faucets right away, and I’ll take care of them.
If you have questions, reach me at [phone/email]. I’m happy to walk through the numbers.
Sincerely, [Name]
The bill-back letter generator creates a printable letter that explains a specific charge, which is useful for the first statement.
Answering the common questions
“Is this just a rent increase?” Be direct. If rent is staying the same, say the total is going up and why. If you are lowering rent, show the before-and-after total with an example.
“Why should I pay for my neighbor’s water?” Explain the method and the vacancy rule, and that a formula is used because the building has one meter. Offer to fix leaks promptly.
“Can I see the bill?” Yes, every month. Sending it with the statement answers this before it is asked.
“What if my share is high one month?” Point to the seasonal pattern and leaks. Our post on answering “why is my utility share so high?” covers how to respond.
The first statement sets the tone
Send the first statement on time, with the math and the bill attached. Make the numbers easy to check. If you made a mistake, correct it quickly and say so. Trust earned in the first two or three months makes the rest routine.
See what a clear monthly statement can look like on our sample tenant email, or use the tenant utility bill template. MeterEase sends each tenant their share with the math shown and the bill attached, after you review it. See 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.