Phil Querin Q&A: Common Area Pass-Throughs


Question: We have submeters to all of the resident spaces in our community for sewer and water. But common area sewer/water was not submetered. We would like to do so now. We are planning to look at the trailing 12 months' numbers in each of these three categories, and dividing those numbers by 12 months, and then dividing those number by the number of sites in our community (175). So my question is: How much notice do we have to give our residents in order to pass this amount thru to them?




Phil Querin Q&A - Multiple Question on Water Sub Metering

Questions. My question is in regards to sewer and water pass throughs:

1. Is it still true, that you can pass through utilities?

2. If so, what is a reasonable time for notice?

3. The newer MHCO space rental agreements do have a provision for pass through, however what if a tenant has been in the park for years & there is no provision for pass through on a rental agreement that they signed?

4. I do know of a MHP that does pass through and they send a bifurcated bill- one for utilities and one for space rent. However, most tenants pay with one check or money order. I have a MHP in Southern Oregon and the sewer is a fixed amount, so it would be easy to divide that amount up between the tenants, obviously with a proviso that if the sewer bill increases or decreases we would make an adjustment to the bill.

A MHP that does pass through water and sewer told me that their bill decreased by about 30% because the tenants knew they were now paying for the water and tried to conserve. They knew their bill would be reduced if they used less water. In my Southern Oregon MHP, the sewer is a fixed amount so that incentive would not be there unless the sewer district decreased their bill to the park and I had not intended to pass through water at this time. NOTE: If I metered the park it would be very expensive & I would have to take each tenant to small claims if they didn't pay. Even though it's the same with pass through, the tenants don't get bill separately each month, so it looks different.




Can You Afford to Keep Utilities Included in Your Rent?

For better than two decades, one of the most significant and unpredictable factors influencing the bottom line of multifamily housing properties has been rising utility costs. This doesn't cause quite as much heartburn for property owners who have wisely passed such utilities through to the residents to pay in addition to their rent. However, for the overwhelming majority of properties, particularly those which were developed prior to the 90's, the rent charged typically includes any combination of utilities including water, sewer, garbage, and to a lesser percentage electricity, natural gas, cable television/satellite, and internet services.

Manufactured Homes and Submetering

Question. A park resident passed away unexpectedly last year. Shortly, thereafter, his widow contacted the park owner and asked if her sister could move in with her. She was approved commencing on October 1. However, when we asked them to come to the office and sign a new rental agreement, they balked at the provision in the MHCO form regarding trees, which provides that, with the exception of hazard trees, tree maintenance is the resident's responsibility.

Apparently, the reason for their hesitation was because, when her deceased husband was alive, the park owner had required him to cut down the trees on his space that had encroached onto the community walkway. They ended up having to pay for repairs to the walkway which had been damaged due to the roots pushing up the cement. Tree roots on other spaces are again encroaching into several areas of the walkway, and they are causing problems in our resident's own yard, as well. These trees, although much smaller, have been in the park for years, and were there long before the current resident and her now deceased husband.

Is this a resident responsibility or a landlord responsibility?

Phil Querin Q&A: Recovery of Capital Costs for Installation of Sub-Metering System

Question: I have two questions regarding submetering.  When a community completes the submetering and the tenant is paying back the community for the meter and cost of installation, who owns and maintains the meters from that point on?  The second question is that we have a community that was metered when it was built but the community is on a master meter and paying for water and sewer.  The community wants to give the notices to the tenants regarding submtetering but keep the current meters and not charge the tenants at this time for the cost of metering.  If the community chooses to upgrade the meters at a later date, can we then pass the cost on to the tenant?

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