THE COST OF WATER is going up, and landlords know just what to do about it: pass the costs on to their tenants. Think that because your apartment doesn't have its own water meter, your landlord can't make you pay? Think again: There is a company that will not only bill you for a portion of your building's water usage but will also charge you for the privilege of forwarding your check to the water department.
Companies like Dallas, Texas-based Minol-MTR (formerly Cascade Water Management), which sends monthly bills to about 60,000 local apartment residents, have found themselves increasingly in demand as more and more landlords have started passing gas, water, and sewer costs along to their tenants. The benefits to landlords are potentially enormous. "It gives [apartment owners] control over their costs," Minol co-president Suzanne Perry says. "If you're paying $20,000 a month in utilities, and all of a sudden you have the ability to pass that cost back, you're going to do it." Perry predicts that within three to five years, tenants will pay for everything from gas to property taxes to insurance. "That's just the trend in the industry, because landlords don't want to pay for that anymore, and legally they can pass that cost back" to tenants.
Minol and companies like it make their money by charging tenants a fee—anywhere from $3.00 to $5.00 a month—for their services. If tenants fail to pay, they can be charged fees that run as high as $25.00—or even, because such water contracts are a condition of a tenant's lease, evicted.
Is it fair to charge tenants for water without measuring how much they actually use? Rahne Kirkham doesn't think so. She lives at the Celebration Park complex in Federal Way, where the apartment manager started distributing a "lease addendum" over the last year as tenants' leases came up for renewal. Under the terms of the addendum, Kirkham says, each resident has to pay a portion of the total water bill at the complex; the amount each resident pays is determined primarily by how many people live in each unit. So far, Kirkham says, her bills have been higher than those paid by her niece, who lives with three other people in a three-bedroom house in the same utility district. "The first bill was $21.90; the second bill was $31.26," Kirkham says. "I'm a single person. I use my dishwasher once a week. I just don't buy it. I don't mind paying for what I use; I just don't want to pay for more than that."
Cascade, which was purchased by Minol earlier this year, was forced to change some of its billing practices as a result of a lawsuit filed in King County Superior Court. According to Minol's most recent literature, usage is determined by dividing total usage by an "occupant factor" based on how many people live in each unit; one person consumes an occupant factor of one, three people a factor of 1.9, five people a factor of 2.5, and so on. Perry contends that Cascade "really [wasn't] doing it correctly to begin with." She acknowledges, however, that the revamped formula still "isn't 100 percent fair."
For example, Seattle Public Utilities water conservation specialist Al Dietemann says, "You could have two college students having parties and shampooing their hair every night, and then have an elderly man who hardly uses any water" living in the same complex.
True, Minol's Perry says, but tenants ought to know what they're getting into before they sign a contract. "They make the decision that they want to live there," Perry says. "It's not like they went into this blind and didn't know it was coming." And in the long run, she adds, tenants generally find it's in their best interest to conserve. "You'll see a reduction of about 25 percent [in water usage] if they have conscious knowledge that they're paying for their own water," she says. "It's a benefit to the resident because his bill is going down."
AND A BENEFIT to landlords, who can save between $5,000 and $8,000 a month in water bills for a typical 100- unit complex. In theory, according to Dietemann, those savings "would take a lot off [apartment residents'] rent"; but in practice, Seattle Tenants' Union director Arlen Olson says, the cash often ends up in the landlord's pocket. "It's a hidden rent increase," Olson says.
Federal Way resident Kirkham says she hasn't seen a dime in savings. "My rent went from $505 to $560, plus they started charging me for water and sewage," she says. Worse, Kirkham believes she's being charged for water used in common areas like the laundry room and swimming pool—facilities she doesn't use and that, under the terms of her lease, she isn't obligated to pay for. To find out what she's being billed for, Kirkham asked her apartment manager for an itemized list of her expenses; if she doesn't get a satisfactory answer, Kirkham says, she's going to the consumer protection division at the state attorney general's office—the only recourse for Washington consumers who think they've been bilked by landlords or water billing companies.
SPU representatives say no hard data exists on exactly how many landlords are passing water costs along to tenants, but those on both sides of the debate say the number is growing fast. "Tenants call us regularly with this problem," the Tenants' Union's Olson says. "There's absolutely no regulation."
One solution—encouraging landlords to retrofit apartment buildings so that each unit would be metered for water individually—was considered and rejected by the city back in 1996, when a pilot study at 12 Seattle complexes showed that "the conservation savings would not be great enough" to justify the cost, according to Patricia Colson, customer service director at Seattle Public Utilities. According to Olson, "[Landlords say,] 'It's too big a cost to put a meter in each person's apartment, so why not just use some scheme and divide up the bill?'"
On the other hand, says Dietemann, the SPU conservation specialist who performed the study, "submetering is happening at a fairly rapid pace in the Seattle area, without intervention, in probably half of all new multifamily construction." Retrofitting, on the other hand, isn't happening—mainly because it usually involves major, and costly, plumbing modifications.
Which leaves tenants like Kirkham wondering where it will all end. While efforts have been made to restrict billing companies' ability to charge high fees and sanction residents who fail to pay their bills in a timely manner—most notably in a 1999 lawsuit in which two apartment residents sued Cascade for unfair debt-collecting practices—it's still perfectly legal for the companies to charge late fees, send eviction warnings, and make customers pay "for the privilege of being billed by them," Olson says. And that, Kirkham believes, just isn't acceptable. "I'm going to force them to be accountable to us for exactly what we're being charged for," Kirkham says. "Basically, they're strangling me out of being able to live here."