SOUNDS GOOD IN THEORY AND LOOKS GOOD ON PAPER, BUT……!

By Darlys Walker

Published August 15, 2012

Yes, there is always a BUT!  It is correct that studies show water usage decreases when sub-meters are installed, which benefits the Association as a whole, and sub-metering can be done relatively inexpensively. In theory, this would financially benefit the Association.

BUT…

And here it is, a number of our Associations have made the decision, as allowed via their documents, to go to sub-meters. They utilize a company to bill out the actual billing, and yes the billing is decreased. HOWEVER, delinquency INCREASES!  This creates more of a financial hardship for the Association!

The problem is that the community continues to be on a “master meter”, which is billed to and paid by the Association.  Adding a sub-meter system will require the homeowners to now make two payments monthly as opposed to one.  The billing company sends out the bills to the Homeowners. This typically adds an administrative cost of $3-$6 per month to each bill.  Billing is typically 45 days behind and the average delinquency on these sub meter accounts runs approximately 25% or more.

There is little recourse for nonpayment.  Typically, there is no allowance for disconnecting water service for nonpayment, and most of our boards soon regret their decision to move forward with the program.

No, it is not fair for a homeowner to pay more than their fair share, but historically we hear this complaint about almost all of the services in an Association.  For instance, why should I have to pay for the fitness center, I don’t work out? Or I don’t use the pool and clubhouse, why should I have to pay for those expenses? BUT, when a homeowner purchased their unit they hopefully read the documents and understood the financial commitment they were making to all other homeowners as part of the Association.

As a CAM, we would suggest working with the Board and water company to implement ways of saving water and take a proactive management approach to decreasing usages as opposed to imposing sub-meters. I am interested in hearing your thoughts and if you have seen the addition of sub-meters successfully meet the expectations of the Boards.