Allocating Water Bills
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ALLOCATING WATER BILLS

QUESTION: I rented my condo to a family of six--two adults and four children. The HOA now wants owners to pay for water based on the number of occupants rather than equally as is currently done. Can the HOA legally require me to pay for water based on the number of occupants?

ANSWER: Unless your document state otherwise, yes they can. In light of the drought and the unequal water usage created by a unit full of renters, allocating expenses based on usage has two advantages for the association: fairness and conservation.

Fairness/Conservation. On the equity side, why should an elderly widow who lives alone subsidize water for a unit with six renters? The more equitable approach is for each owner to pay their own share of water usage. Making owners pay based on usage also creates an incentive to conserve water. Owners will use less water when the money flowing out of their pocket is tied to the water flowing out of their faucet.

Possible Amendment. Whether the association can change its billing practice depends on its governing documents. If the CC&Rs clearly require that the cost of water must be shared equally regardless of usage, the association must amend its documents before it can change its billing.

Allocation Methods. There are two ways to allocate costs to owners. The first is to install meters, the second it is to estimate the costs.

1.  Water Meters. Depending on how the units are plumbed, water meters can be installed. Unfortunately, most condominium construction (stacked units) have several water lines entering the units--one for kitchens, another for bathrooms, etc., with each connected to a vertical riser feeding multiple units. Thus, the installation of a meter for each unit is not feasible. Townhouse construction, on the other hand, can easily be metered. Typically, a single water line enters the unit. The cost to install them in the entire development normally requires a special assessment approved by the membership.

2.  Estimated Usage. If water meters are not feasible, associations can bill owners based on estimated usage. In Watts v. Oak Shores, the court supported the association's authority to allocate costs. The principles outlined in the Watts decision have a broader application than just renters. If an association is master metered, it could estimate water usage based on the number of people living in a unit. The court of appeals wrote that:

Nothing in the language of [Civ. Code §5600(b)] requires the exact correlation between the fee assessed and the costs for which it is levied... In some instances, such an exact correlation may be impossible to obtain. In other instances, the costs of studies necessary to obtain an exact correlation may be prohibitive... The most reasonable interpretation of [Civ. Code §5600(b)] is that it requires nothing more than a reasonable good faith estimate of the amount of the fee necessary to defray the cost for which it is levied. (Watts v. Oak Shores.)

According to the California Water Resources Control Board, residential water use averages averages 77 gallons per person per day but ranges from 43 gallons to 427 gallons per person depending on the locale. A map of California published by the New York Times shows water usage around the state. An association could use such numbers to estimate water usage and levy appropriate charges.

Recommendation: Condominium associations should have legal counsel review their governing documents to see if they can bill owners based on water usage. If not, they need to amend their documents.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

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