Wondering if you can charge the tenant of your rental property for water? The answer is, as always, it depends!
What can you charge?
The property owner can pass on the full water usage charges to the tenant of a rental property. The property owner cannot, however, pass on the fixed access charges or sewerage related charges. In order to charge the tenant for water usage the following criteria must be be:
- the property must be individually metered
- the property must be water efficient
- the tenancy agreement must state that the tenant is to pay for water usage
Just to demonstrate, here are the parts of a water bill where charges can be passed onto the tenant:
What does water efficient mean?
The property must have flow restricted taps over the basins, laundry tub and kitchen sink as well as shower heads. This means not exceeding 9lt/min. The toilet also has a flow limit and must be dual flush.
Do you have to have a water compliance certificate?
In order to prove that a property is water compliant, although it is not legislation, it is best practice to obtain a Water Compliance certificate from a plumber. This will reduce any risks of the tenants disputing the water efficiency of the property. There have been cases in QCAT of tenants disputing water usage charges and where a water compliance certificate had not been obtained the ruling was made in favour of the tenants.
We strongly recommend that a Water Compliance Certificate is obtained on the property if you intend to on-charge water usage. The approximate cost is $70 – 100 for the plumber to attend, assess and issue the certificate. If any work needs to occur at the property to make it compliant then the plumber will usually conduct any small items whilst on site and charge for this work or contact us to discuss any more significant items.
How do I charge a tenant for usage?
- Document it in the Tenancy Agreement – First and foremost, make sure that the ability to charge water usage has been documented in the general tenancy agreement (GTA). If it’s not in there then nothing else matters. If you already have a tenant in place and water usage has not been documented in the GTA then you will need to wait until you renew the lease or enter into a new lease.
- Meter reading – The timing of water bills hardly even correspond with the start and end of tenancy agreement, so it’s important to obtain a meter reading at the start and end of each tenancy, allowing your property manager to calculate the portion of water usage that a tenant is responsible.
- Water efficiency certificate – Engage a plumber to undertake an assessment and issue a compliance certificate. This allows no doubt around the water efficiency status of the property. You may need to have this reviewed after a tenancy ends to ensure there have been no unauthorised changes to a property, once again though, there is no legislative requirement around this and how frequently you choose to redo the compliance assessment and issuing of a certificate is up to you.
- Pay your water bill in full then forward it to the property manager – As the water bill will be in the owners name, it is in your best interest to pay the water bill in full and then seek reimbursement from the tenant via your property management agency. The Property Manager will calculate the water usage portion of the bill and send an invoice to the tenant for this amount.
Can I store up the bills and forward them all at the end of the tenancy?
No. Definitely not a good thing to do! A couple of reasons here, one is that anything older than six months is not able to passed onto the tenant. Second reason is that storing up a large number of bills for a tenant may put them in a difficult cashflow position. Best practice is to forward the bill onto the Property Manager as soon as possible as each bill comes through once you have paid the bill.
There is a great water charging factsheet at the RTA website which covers all of this information.