Special assessment for excessive use of common utilities

Started by RonW7 • 19 replies • 1886 views

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RonW7 (Ohio)
Posts: 122

Posted:

Skinny: Our association consists of 5 buildings, each consisting of 4 units for a total of 20 units. Our water is a common utility and is metered at each building. I've been trying to get the community to agree to have our water metered at each building so that each owner can pay for their own water, but the majority does not like that idea.

So I've come up with another idea: Can I calculate the average water usage across all buildings and then, for buildings with above-average usage, assess each owner there for excessive use of common utilities?

For example, let's say the individual annual water costs for all buildings in 2014 were 1,000, $1,100, $840, $700, and $1,240. That all averages to $976. The four units who used $1,240 worth of water are $264 over the average, so they would see a monthly increase above the standard assessment of $22 in 2015. For the four units that used $700 worth of water, they would see a monthly decrease of $23.

The only snag I can think of is that there's no way to tell what portion each individual member is responsible for since water is metered at each building rather than each unit. Because this increase in monthly fees would have to be filed as a special assessment, the association is required to follow protocol by giving the unit owner the right appeal the assessment. If this were to go to court, it's easy to imagine that it would be an easy win for the owner.

Any thoughts on this?

TimB4 (Tennessee)
Posts: 21,059

Posted:

As you suggested, the fix is to meter the buildings separately and divide the bill amongst those members or, meter each unit directly.

Keep in mind that outside taps would need to be separated from the building or individual meters as those would likely be the Association responsibility (unless the tap is in an exclusive use common area, like a patio or enclosed rear yard). This would be because there would be no way to identify who was using water from the outside tap.

JonD1
Posts: 2,350

Posted:

As John is our resident plumbing expert I would like to hear his views.

IMO depending on the current plumbing system to now create separate metered units might prove expensive and time consuming.

You might have to now run a separate supply line to each unit rather than currently having a loop feeding all the units in one building.

As to assessing all residents in the building with the highest combined usage absent a way of proving their individual breakdown seems like a claim ripe for failure.

legally how can you assume each is responsible for the higher usage?
How do you justify each individual bill per unit?
So if I live in a building where one resident wastes water I get to pay 1/4 of that cost?

Sounds like more of problem rather than a solution.

RichardP13 (California)
Posts: 163

Posted:

One way is to adjust assessments based on variable costs, insurance and utilities. I believe you have to have them in your CCRs.

RonW7 (Ohio)
Posts: 122

Posted:

Quote:

Posted By TimB4 on 03/28/2015 9:44 AM
As you suggested, the fix is to meter the buildings separately and divide the bill amongst those members or, meter each unit directly.

Keep in mind that outside taps would need to be separated from the building or individual meters as those would likely be the Association responsibility (unless the tap is in an exclusive use common area, like a patio or enclosed rear yard). This would be because there would be no way to identify who was using water from the outside tap.

Indeed the optimal solution is to meter at each unit, but, as I stated, the community opposes this because of the costs. Some of them like having one bill to pay (I'll never understand the logic of paying $20 more a month just so you only have to write one check, but whatever). Others think shared water is attractive to potential buyers which is certainly true if it's a family of four who would love to be subsidized by the single residents.

Also, each unit has an outside tap in the front and rear.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Well, without membership support, you aren't going to get individual meters.

Suggest working on membership support.

You may need to work up an average household water bills from other communities. Get family of 2, family of 3 or 4 with small children (elem school) and family of 3 or 4 with teens or adult children living at home. Then do a cost comparison and see how what the savings would be for each type of household, compared to current charges. this could sway support.

The cost of the meters will never be recouped. So that's not a good argument. It simply allows billing to individual units, vs. billing to all.

RonW7 (Ohio)
Posts: 122

Posted:

Quote:

Posted By JonD1 on 03/28/2015 9:59 AM
As John is our resident plumbing expert I would like to hear his views.

IMO depending on the current plumbing system to now create separate metered units might prove expensive and time consuming.

You might have to now run a separate supply line to each unit rather than currently having a loop feeding all the units in one building.

As to assessing all residents in the building with the highest combined usage absent a way of proving their individual breakdown seems like a claim ripe for failure.

legally how can you assume each is responsible for the higher usage?
How do you justify each individual bill per unit?
So if I live in a building where one resident wastes water I get to pay 1/4 of that cost?

Sounds like more of problem rather than a solution.

The purpose of wanting to do this is to give those who use the least amount of water a chance to feel the relief of a lower monthly fee in the hopes that I can stimulate their interests in voting to meter at each unit. You are right, though, it would be 4 people subsidizing one person instead of 19, but that could help get people in the mode to meter at the units.

Also, as you and one other have stated, proving individual use is impossible. However, our by-laws give the association the right to assess owners for excessive use of common utilities. One year, I had to assess an owner a figurative amount of $500 because his pipe broke one winter and water was flowing freely for three days. I had to take the amount of that building's next water bill and subtract from it the average of the last five bills and assess him for that difference. He was also in the middle of selling, so perhaps he could have fought it if he didn't decide to cut his losses instead.

RonW7 (Ohio)
Posts: 122

Posted:

Quote:

Posted By TimB4 on 03/28/2015 10:48 AM
Well, without membership support, you aren't going to get individual meters.

Suggest working on membership support.

You may need to work up an average household water bills from other communities. Get family of 2, family of 3 or 4 with small children (elem school) and family of 3 or 4 with teens or adult children living at home. Then do a cost comparison and see how what the savings would be for each type of household, compared to current charges. this could sway support.

The cost of the meters will never be recouped. So that's not a good argument. It simply allows billing to individual units, vs. billing to all.

To all -

I think there are several here who have misread my OP. I am NOT asking for advice on how to get each unit metered individual. If you read my OP, you will see that I have come to terms with the fact that this will not happen.

I am looking for advice on whether or not I can legally get away with assessing the residents of individual buildings that have an above-average usage. This is also not a post to argue about whether or not you think this a good or bad idea, but whether or not you think it would hold water if challenged in court.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Ron,

In the case of the broken water pipe example you provided, absolutely.

Otherwise, the Board needs to define "excessive" and a way to prove it (as you easily could with the broken pipe).

As an option, depending on the wording of your governing documents, you may be able to divide the bill based on the number of full time residents in the home.

Four units per building.
Unit A has 4 residents.
Unit B & C have 2 residents
Unit D has 1 resident.
Example: $500 water bill

500 divided by 9 (total number of residents) = 55.555 per resident

Unit A pays $222.22 (55.555 x 4)
Unit B pays $111.11 (55.555 x 2)
Unit C pays $111.11 (55.555 x 2)
Unit D pays $ 55.56 (55.555 x 1 rounded up)

Total $500

JohnB26 (South Carolina)
Posts: 1,001

Posted:

If outside hose bibs are 'shared' by multiple 'units' it may not be practical to individually meter (in the cost effective sense).

If, repeat if, the supply piping is readily accessible and any 'common' taps can be isolated then individual meters (units or buildings) 'could' be installed.

A single properly installed meter will be about $800 - $1200 incl. labor NOT COUNTING THE OTHER PLUMBING CHANGES REQUIRED FOR ITS' INSTALLATION.

Then:

Who will read the meter?
Who will (periodically) calibrate and/or replace the meter?
Who will be responsible for maintenance and access issues?

IMO:

Fuh - Ged - 'Bout - It

You may, however, have a licensed bonded insured plumbing outfit come out and tell you the same

ps. checking to see how many residents live in a given 'unit' would not be practical UNLESS you wish to operate like the Gestapo with unannounced midnight visits

JohnB26 (South Carolina)
Posts: 1,001

Posted:

I am looking for advice on whether or not I can legally get away with assessing the residents of individual buildings that have an above-average usage. This is also not a post to argue about whether or not you think this a good or bad idea, but whether or not you think it would hold water if challenged in court.

It would NOT pass a court challenge.

You may NOT change the CCRs w/o actually amending them.

You already knew this.

We will NOT vindicate your proposed covenant violation.

RonW7 (Ohio)
Posts: 122

Posted:

Quote:

Posted By JohnB26 on 03/28/2015 12:31 PM

It would NOT pass a court challenge.

You may NOT change the CCRs w/o actually amending them.

You already knew this.

We will NOT vindicate your proposed covenant violation.

John, I think you posted in the wrong thread because no one in this thread has even so much as alluded to taking any action that might require a change to CCRs.

BonnieG1 (Nebraska)
Posts: 1,186

Posted:

Quote:

I agree

NpS (Pennsylvania)
Posts: 4,216

Posted:

We have spent a great deal of time on water conservation. We are using a million gallons less this year than we were two years ago (a drop of 26%).

We are 81 townhouses in 17 groupings. One meter serves the entire community.

What we have found:

There are companies out there that will install individual meters and, if you want, bill your units individually. This can be done with no capital outlay from the HOA. The cost of the equipment and installation can be amortized over 5 years and included in the monthly amount the HOs pay. We learned that legally, we could include in the monthly bill to each HO: (a) the capital investment; (b) the water at the rate the HOs would pay themselves if individually metered (we pay a bulk rate); and (c) a reasonable administrative charge. The way we planned to set it up, all costs would pass through to the HOs, and the total cost, even with the meters, would not have been significantly different that today's costs. We might have gone that route - but we dedided to explore other options first - we may still do it later. The reason I mention this is that you should not let the objection to cost get in the way of exploring the true cost differential. It might surprise you. (Since you already have meters at the building level, your installation costs might be less than ours would have been.)

We gave away free aerators and showerheads and we gave $150 for every toilet replaced. We spent around $24k overall. We are saving about $8k per year in lower water bills. I'll take a 3 year payback anyday.

In addition to our monthly fees, we introduced a quarterly fee for water. To avoid legal challenge, the quarterly fee is the same for everyone. HOWEVER, we allow individual HOs to earn quarterly conservation credits which can be applied against the quarterly fee. We have only been doing this for two years, so I can't report much - except to say that you had better have your HOA house in order before you attempt something like this. Lots of confusion and complaints early on. Seems that everyone has settled down especially when we can demonstrate the water savings.

I personally interviewed our last 4 buyers. All of them said that the fact that the cost of water was included was great - but all of them said that they learned about it AFTER they bought. So no, I don't think that "included water" is an inducement to buy.

Before we put the quarterly fee program in place, everyone paid 1/81 of the water bill (it was included in the monthly fee). Sometimes a HO would complain about a neighbor washing their car 3x a day. But no one was focused on their own water conservation. We have changed all that.

The biggest complaints about the fairness of our quarterly conservation credits are about # of people in a house and part-time residents. This year will be the test of how we work through these issues.

But as far as legality is concerned, we are comfortable that we set things up as: (a) same quarterly fee for every house; and (b) variable rebates depending on participation in our water conservation programs.

One thing I can say - by tying conservation into individual cost, we have achieved results that would have been impossible under our old ways.

Sikubali jukumu. Read all posts at your own risk.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I did belong to one townhouse association that did retrofit individual water meters to each unit but it was easy as each unit had a basement where the water pipe came in. I can see how to retrofit individual homes, but I am at a loss as to how one could retrofit a multi floor building.

Maybe some in the construction business can explain how to.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By JohnC46 on 03/28/2015 5:48 PM
I did belong to one townhouse association that did retrofit individual water meters to each unit but it was easy as each unit had a basement where the water pipe came in. I can see how to retrofit individual homes, but I am at a loss as to how one could retrofit a multi floor building.

Maybe some in the construction business can explain how to.

The companies we spoke with dealt with all types of buildings. Many commercial buildings with multiple tenants have apparently taken this route. Don't see why it should be so different in a residential property.

Sikubali jukumu. Read all posts at your own risk.

GlenL (Ohio)
Posts: 5,491

Posted:

Ron when you purchased your unit, which I'm assuming you did so voluntarily, there is a section that describes the common expenses of which I'm sure water is included. To begin with as John alluded the first step would be to amend the covenants to allow individual metering.

What's next, charging for trash removal based on unit occupancy?

Studies show that 5 out of 4 people have problems with fractions

RonW7 (Ohio)
Posts: 122

Posted:

NpS - Your post was most inspiring, and I will be looking into this more having read it.

RonW7 (Ohio)
Posts: 122

Posted:

Quote:

Posted By GlenL on 03/28/2015 8:13 PM
Ron when you purchased your unit, which I'm assuming you did so voluntarily, there is a section that describes the common expenses of which I'm sure water is included.

Glen, will you tell me what you are saying? Are you saying that every single rule/provision/law/whatever is set in stone forever for eternity once it is initially passed? No one can ever begin to recognize any flaws whatsoever in any system by virtue of the fact that, if the system was able to initially exist, it must be without flaw? If this is not what you are saying, what are you saying?

Quote:

Posted By GlenL on 03/28/2015 8:13 PM
To begin with as John alluded the first step would be to amend the covenants to allow individual metering.

You should re-read my OP. It has been established that individual metering is not an option due to lack of community approval. I am already aware of this. You do not have to tell me this.

Quote:

Posted By GlenL on 03/28/2015 8:13 PM
What's next, charging for trash removal based on unit occupancy?

This doesn't even make any sense. The waste management company doesn't charge us based on unit occupancy. They give us a bin and charge the association a flat rate provided that the following conditions are met:

1) Bins do not exceed the weight capacity of X pounds
2) Bins are not heaping full

The day that the waste management company charges by unit occupancy is the day that the board has to adjust fees accordingly. That was really easy to figure out. Were you not able to figure that out?

GlenL (Ohio)
Posts: 5,491

Posted:

No Ron, I'm not saying they are set in stone forever but that the first step to allow your Rube Goldberg scheme would be to amend the Covenants to allow it. I know you think this will punish the multiple families while saving poor single individuals mega bucks, I gotta tell you it ain't going to work. How do you know the multiple members are the ones using the water? I know it sounds logical but what of the individual who showers multiple times a day, runs the dishwasher without it being full etc.

As to the garbage comment, it is just a logical extension of your proposed water policy in order to save money for the single folk.

For your other thread HOA Mission Statement: http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/191737/view/topic/Default.aspx

How's this? Move here to Arid Acres HOA, where we measure every drop of water you use and make you pay for it!

Studies show that 5 out of 4 people have problems with fractions

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