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utildist@tceq.texas.gov
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Water and Wastewater Submetering or Allocation

A description and explanation of submetered and allocated utility billing.

The TCEQ writes rules to govern billing practices for water and wastewater utility services provided by property owners to tenants (or by condominium associations to members).

What is "submetered" or "allocated" billing?

Under both of these billing methods, the local public utility measures water use for the whole property at a "master" meter and then bills the property owner based on the master meter reading. Then:

  • under submetered billing, the owner uses submeters at each dwelling unit to bill tenants based on their actual water use.
  • under allocated billing, the owner does not meter each dwelling unit, but uses a formula to allocate utility charges among the tenants.

The charges billed by the owner are based on the bill received from the public utility.

Who can bill tenants in these ways?

Owners of the following types of properties are allowed to bill their tenants for the actual cost of water or wastewater service provided by the local utility:

  • apartments
  • manufactured home rental communities
  • condominiums
  • strip malls, marinas, and other multiple-use facilities

Owners who submeter or allocate utility bills must follow TCEQ rules and must file a Registration of Submetered or Allocated Utility Service Form (TCEQ-10363) and a TCEQ Core Data Form (TCEQ-10400) for each property where tenants are billed.

What changed as of January 2003?

The 77th Texas Legislature made several changes in the state law that allows property owners to bill their utility costs to tenants. Those changes were effective September 1, 2001, and are applicable to existing properties which implement submetered or allocated billing after January 1, 2003, and properties on which construction begins after January 1, 2003.

Property owners NOT AFFECTED by the new requirements are those who:

  • Began billing tenants for submetered or allocated services provided in 2002 and continue to do so
  • Will continue to provide services as an "incidence of tenancy" after 2002

Property owners AFFECTED by new requirements under the law and TCEQ rules are:

  • Those who plan to begin billing tenants for services used after 2002
  • Those who own property on which construction began after 2002

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The new requirements are summarized as follows:

Before Allocated or Submetered Billing Is Implemented After January 1, 2003*

    • Ensure sink or lavatory faucets, faucet aerators and showerheads meet low–flow standards.
    • Perform water leak audits and repair leaks

And, within one year

  • Remove toilets using more than 3.5 gallons per flush
  • Replace with toilets not exceeding 1.6 gallons per flush
*These requirements do not apply to a manufactured home rental community owner who does not own the manufactured home for which space is being rented

New Construction, unless an exception applies (see below):

  • Install a plumbing system compatible with the installation of submeters for each dwelling or rental unit and install submeters OR
  • Make arrangements with the utility to provide individual meters and install a plumbing system compatible with the installation of meters by the retail public utility
Exceptions
  • The property owner provides government assisted or subsidized rental housing to low or very low income residents
  • The retail public utility has determined the installation of individual meters for each rental unit is not feasible

New Construction, if one of the exceptions applies:

  • Install a plumbing system compatible with the installation of submeters or meters. TCEQ recommends the property owner maintain records to establish which exception applies

Click on Texas Water Code, Chapter 13, Subchapter M Adobe Acrobat PDF Document or in the section below titled, "Where can I get more information?", to download a current copy of "Submetering and Nonsubmetering for Apartments and Manufactured Home Rental Communities and Other Multiple Use Facilities" (Texas Water Code, Chapter 13, Subchapter M).

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Some misunderstandings about the effect of changes made to the state law are addressed below.

Each of the following statements is FALSE Explanation
All property owners will be required to bill tenants for water/wastewater services. The Water Code does not require an owner to bill tenants for utility services.
All properties with submeters in place must bill tenants on a submetered basis.

Only submetered billing will be permitted after 2002 for both new and existing properties.

The Water Code does not require an owner to issue bills based on submeter measurements. (However, once a property is billed on a submetered basis, the owner must obtain TCEQ approval to change from submetered to allocated billing.)
Submeters or meters are required on ALL property on which construction begins after 2002. The exceptions to this requirement are discussed above.
All property owners billing for utility services will be required to conduct water leak audits and ensure all plumbing fixtures and toilets meet current, low-flow standards. This requirement only applies to properties which implement allocated or submetered billing after 2002. With regard to retrofitting toilets, only those that use more than 3.5 gallons per flush must be replaced and the owner has one year in which to do so.
Property owners which began billing prior to 2003, discontinue billing, then begin billing again are "grandfathered" with regard to the new requirements. The requirements which apply to properties implementing an allocated or submetered billing program after 2002 DO apply to properties that discontinue billing, then "re–implement" a billing program.

Where can I get more information?

We make camera-ready copies of the rules and related publications available for owners to reproduce and distribute to their tenants. Each of these items is available in PDF format by clicking on the underlined word in the following list.

  • The related lawAdobe Acrobat PDF Document (Texas Water Code Chapter 13 Subchapter M)
  • Our rulesAdobe Acrobat PDF Document for billing practices (Title 30 Texas Administrative Code Chapter 291 Subchapter H)
  • A tenant guide about allocated billing, available in English and Spanish
  • A tenant guide about submetered billing, available in English and Spanish

These tenant guides are easy-to-read summaries of tenants' rights and owners' responsibilities under our rules.

Staff Contact

For more information you may e-mail your questions or comments to utildist@tceq.texas.gov. You can also call our main Water Supply Division line at 512-239-4691.

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