How the estimate works
Billable per month = (shared bills − common-area share) × occupancy. The owner keeps the common-area share and absorbs the share for vacant units. Multiply by 12 for the year.
Worked example: an 8-unit building
Fictional numbers: $640 a month for water and sewer and $160 for trash, 8 units, all occupied, and 10% of the bills going to common areas.
| Step | Calculation | Result |
|---|---|---|
| Shared bills | $640 + $160 | $800.00 a month |
| Common-area share | $800 × 10% | $80.00, owner keeps |
| Vacant share | $720 × 0% vacant | $0.00 |
| Billable | $800 − $80 | $720.00 a month |
| Per year | $720 × 12 | $8,640.00 |
| Average per unit | $720 ÷ 8 | $90.00 a month |
Each tenant’s actual share depends on the split method in your lease. Run a real bill through the RUBS calculator to see unit-by-unit amounts, or compare against a fixed charge with the flat utility fee calculator.
Before you start billing back
- Make sure the lease says which utilities are billed, how they are split, and when payment is due. New charges usually start at lease renewal.
- Check your state’s rules. The utility billing guides by state link to the statutes and agency pages we found.
- Tell tenants ahead of time. The bill-back letter generator drafts the notice.
Questions
What does the bill-back estimator calculate?
It adds up the shared utility bills you pay each month, takes off the common-area share you keep, then takes off the share for vacant units, which the owner absorbs. What is left is the most you could bill tenants each month, and the annual figure is that amount times 12.
Why does the owner keep the common-area and vacant shares?
Tenants generally should not pay for hallway lights, irrigation, a laundry room you run, or empty units. Keeping those shares with the owner is the common approach in ratio billing. If your lease or local rules say something different, follow them.
How do I find my common-area percentage?
Use the common-area deduction calculator. It works the share out from a fixed amount, square footage, or master and submeter readings. If you have no common-area use on a bill, such as trash for units only, enter 0%.
Is the estimate what I will actually collect?
No. It is an upper bound from the numbers you enter. Your lease has to allow utility charges, some places limit or regulate them, bills change month to month, and not every tenant pays on time. Treat it as a planning number, not a promise.
Is this legal advice?
No. It does the arithmetic only. Rules on billing tenants for utilities vary by state, city and utility type. Check your lease and local rules before you bill.