Shared utilities in plain English
A small multifamily property may have one utility account for the whole building, separate accounts for each unit, or a mix. Electricity may be separate while water, sewer, gas, trash, irrigation, laundry, or common-area service stays shared.
Separate meters, master meters, and submeters
| Term | Plain-English meaning | Due-diligence question |
|---|---|---|
| Separate utility meter | A utility provider may measure and bill one account separately | Which unit or area does it actually serve? |
| Master meter | One provider meter may measure several units or areas together | What apartments, common areas, or systems are included? |
| Submeter | A secondary device may divide usage behind a master account | Who owns, reads, maintains, and bills from it? |
| Owner-paid utility | The owner pays the provider bill | Is the expense complete and reflected in the property records? |
| Tenant-paid utility | The tenant may hold an account or pay under the lease | Does the lease and billing history support the arrangement? |
Why meter count does not prove legal unit count
An extra electric or water meter may show that space was separately served. It does not by itself prove that zoning, permits, certificates, or occupancy records recognize another dwelling unit. Compare the meter setup with the legal-unit-count review and local records.
Lease responsibility for utilities
Read each lease and addendum. Identify who pays electric, water, sewer, gas, trash, internet, irrigation, laundry, and common-area service. Do not assume the current management practice matches the written agreement.
“Tenant pays utilities” is not specific enough. Record the service, account holder, meter, billing method, and lease language for every unit.
Owner-paid vs. tenant-paid utilities
Neither arrangement is automatically better. Owner-paid utilities may increase operating expenses but simplify service control. Tenant-paid accounts may shift direct consumption cost but still leave common-area, vacancy, leak, arrears, and transfer questions. Use actual records rather than a slogan.
Review the billing history
Request at least a useful historical period of bills when available. Compare monthly charges, consumption, seasonal changes, estimated readings, adjustments, late fees, deposits, and account changes. Miami-Dade notes that high bills can result from leaks, incorrect readings, or estimated readings, which is one reason a single month should not be treated as normal.
Common-area and vacant-unit usage
Identify laundry rooms, exterior lighting, pools, irrigation, pumps, gates, elevators, water heaters, vacant units, and owner-use areas. Ask which account carries each load and whether the property’s expense history separates residential and common use.
Utility arrears, deposits, and shutoff risk
Ask the provider, seller, manager, title or closing professional, and attorney what balances, deposits, transfer requirements, liens, or service interruptions may affect the property. Florida Statute 180.135 addresses certain municipal utility charges involving former occupants, but property-specific conclusions belong with the utility provider and Florida attorney.
Informal allocation and rebilling arrangements
If the owner divides a master bill among tenants, request the lease language, calculation method, bills, notices, and payment records. Do not assume ratio billing, administrative fees, or submeter billing is permitted everywhere. Miami-Dade requires registration and compliance for covered water-remetering properties and billing companies.
Inspect the physical utility system
A licensed electrician, plumber, engineer, or other appropriate professional can help identify what each meter and line serves, unsafe conditions, shared panels or water heaters, cross-connections, leaks, and practical separation limits. Physical inspection does not replace zoning, utility-provider, or legal review.
Utility-provider and municipal records
Request account and meter numbers, service addresses, meter locations, start and stop requirements, deposits, billing history, and any remetering or submeter records. Confirm directly with the relevant provider because water, sewer, electric, gas, and municipal practices can differ.
Who answers which question?
| Professional or agency | Primary question |
|---|---|
| Utility provider | Account, meter, service, arrears, deposit, transfer, and provider requirements |
| Florida attorney | Lease duties, charges, disclosures, notices, and legal rights |
| Property manager | Billing history, allocations, collections, vacancies, and operating procedures |
| Electrician or plumber | What the physical system serves and its condition within professional scope |
| Zoning or building official | Recognized use, permits, occupancy, and local records |
| Lender and appraiser | Underwriting, expense normalization, recognized income, and valuation treatment |
| CPA | Accounting and tax treatment |
| Insurance professional | Coverage, underwriting, and risk questions |
Utility-record comparison framework
| Record | What it may show | What it does not prove alone |
|---|---|---|
| Utility bills | Charges, consumption, account history | Which unit created each part of shared usage |
| Meter list | Meter numbers and service locations | Lawful dwelling-unit count |
| Leases | Stated payment responsibility | That practice and billing always followed the lease |
| Property records | Recognized use and permit clues | Exact current utility wiring or plumbing configuration |
| Manager records | Collections, allocations, and operating history | Legal compliance by themselves |
Buyer and investor due-diligence checklist
- List every utility service, account, meter, and service address.
- Map each meter to the units, systems, and common areas it serves.
- Compare leases with actual billing and payment practices.
- Review historical bills, consumption, adjustments, late fees, and deposits.
- Identify owner-paid, tenant-paid, vacant-unit, and common-area usage.
- Review utility arrears, transfer requirements, and shutoff concerns.
- Compare meter configuration with legal unit count and permit records.
- Review any submetering, remetering, reimbursement, or allocation arrangement.
- Obtain physical-system review from appropriate licensed professionals.
- Ask the attorney, manager, lender, appraiser, insurer, CPA, and utility provider their separate questions.
Professional questions to ask
- Seller: Which utility accounts and deposits exist, and what does each meter serve?
- Property manager: How are bills allocated, collected, reconciled, and handled during vacancy?
- Utility provider: What accounts, meters, balances, deposits, and transfer requirements apply?
- Attorney: Do the leases, charges, disclosures, and notices support the current practice?
- Electrician or plumber: What does each physical service actually supply?
- Zoning or building official: Do local records recognize the property’s use and permitted configuration?
- Lender or appraiser: How will owner-paid utilities and reimbursements be treated?
- CPA: How should utility expenses and reimbursements be recorded?
