Tests Waived For Submeter Users

By Betsy Loeff
AMRA News Writer

For landlords using submeters to stop rental profits from gushing down tenants' drains, there's new regulatory relief ending the nuisance of mandatory water-quality testing. That's because property owners using submeters to bill tenants for water consumption no longer need to worry about complying with Safe Drinking Water Act (SDWA) guidelines. On December 16, 2003, the Environmental Protection Agency revised its policy concerning the applicability of the SDWA to submetered properties.

Previously, the EPA considered a property owner who billed tenants for water "to be operating a fully regulated public water system, even though there had been no other change relevant to the delivery or potential health concerns associated with the water," writes G. Tracy Mehan III, assistant EPA administrator, in the December 16 memo outlining SDWA revisions. Under the SDWA, operators of public water systems must monitor and comply with water quality standards, although individual states decide what those standards will be, how much monitoring will be required and who must perform such tests.

Traditionally, most states haven't considered apartment landlords using submeters for billing purposes to be public water systems subject to SDWA testing requirements, but there have been notable exceptions. In Tennessee and North Carolina, apartment owners with submetering used in their properties have been required to test water quality and submit monthly reports from a certified water treatment specialist. Now, the revised policy eliminates those pricey landlord hassles.

The New Policy
According to the new policy and Mehan's December 16 memo, "Submetering means a billing process by which a property owner (or association of property owners, in the case of co-ops or condominiums) bills tenants based on metered total water use; the property owner is then responsible for payment of a water bill from a public water system."

Mehan continues, "Under the revised policy, a property owner who installs submeters to track usage of water by tenants on his or her property will not be subject to SDWA regulations solely as a result of taking the administrative act of submetering and billing. Property owners must receive all of their water from a regulated public water system to qualify under the terms of this policy revision for submetered properties."

Marc Treitler, general counsel for Viterra Energy Services and co-chair National Submetering and Utility Allocation Association (NSUAA) regulatory committee, points out that the new policy doesn't affect property owners who use a ratio utility billing system (RUBS) method of assigning costs. With RUBS, the property owner divides the property's water bill among renters based on square footage rented, number of occupants or some other quantitative measure. Also, the new policy doesn't affect property owners using hot water hybrid billing, in which only hot water is submetered and then factored into an estimate of overall usage. Landlords using RUBS or hot water hybrid methodologies may still need to test water quality in some states, according to Treitler.

"The new policy isn't perfect, but it's a big win for submetering," Treitler says. "It basically exempts most property owners from water testing and removes a hurdle to submetering of apartments." Treitler also notes that NSUAA is still waiting for states to enact their own interpretations of the new policy.

Source: AMRA News April 2004
Reprinted with Permission