Odd utility billing in Florida by property management companies

Question

Here in Florida there's been a migration in the way tenants of apartments are billed water, trash, sewer, and pest control. It used to be that the local municipality billed the tenant directly for their exact usage. Now, management companies are using 3rd party billers, of which there's a marked increase in the cost of utilities.

There are two popular methods of calculating these utility costs applied by most management companies. The first is to bill for exact usage. In this case the management company receives your metered bill, pays it, and then has the tenant billed by the 3rd party which is then added to the rent payment. The second is to use an algorithm to "share" the cost among tenants. In these cases the algorithm varies but in all cases the tenants who use less pay for the tenants who use more (this is always included in an addendum to the rental agreement).

Regardless of the method, management companies refuse to show the original bill so that the tenant can independently verify that they're being charged the correct amount. Further, many will lie and claim they have nothing to do with the charges and that it's completely controlled by the 3rd party biller.

Does the tenant have a right to see the bill and verify that the required payment is correct? What remedies might be available to the tenant in Florida should the first question prove true (and the landlord or management company refuse to provide documentation)?

Answer 1

My guess is the answer to this question is going to be in your lease. You likely signed a lease that agreed that you would pay accept this practice and spelled out what ever rights you have to challenge the billings. My guess is they are as limited as the courts will allow in Florida. And the only way to ensure access to those records would be to get the court to compel they provide you with the records.

Perusal of the Water codes in Florida does not appear to directly engage this practice(I could have missed it). However it appears that there is code regulating the management of electrical limits the billing to no more than the actual costs to the customer of record(probably your real estate management company.)

According the the NCSL (This refers to electrical service. I am assuming there is similar language used elsewhere for plumbing, or that the intent of the law is uniformity of these codes in all utility billings.

Where individual metering is not required and master metering is used in lieu thereof, reasonable apportionment methods, including submetering may be used by the customer of record or the owner of such facility solely for the purpose of allocating the cost of the electricity billed by the utility. The term “cost” as used herein means only those charges specifically authorized by the electric utility's tariff, including but not limited to the customer, energy, demand, fuel, conservation, capacity and environmental charges made by the electric utility plus applicable taxes and fees to the customer of record responsible for the master meter payments. The term does not include late payment charges, returned check charges, the cost of the customer-owned distribution system behind the master meter, the customer of record's cost of billing the individual units, and other such costs. Any fees or charges collected by a customer of record for electricity billed to the customer's account by the utility, whether based on the use of submetering or any other allocation method, shall be determined in a manner which reimburses the customer of record for no more than the customer's actual cost of electricity. Each utility shall develop a standard policy governing the provisions of submetering as provided for herein. Such policy shall be filed by each utility as part of its tariffs. The policy shall have uniform application and shall be nondiscriminatory (Fla. Administrative Code §25-6.049).

Now here is where the 3rd party comes in. The 3rd party is the one levying fees for the management on your landlord. Granted if you follow the strings ill bet you find that the billing company is owned by the same company that owns your rental management firm. So your landlord can collect no more than what it costs to provide you with the service, but part of providing the service is employing this 3rd party utility management firm.

Answer 2

I realize this is thread is pretty old by now, but I figure I'd throw in my thoughts just for good measure. One reason I tend to find these 3rd-party sub-metering and cost-allocation practices sketchy is that they do not seem to fall subject to much, if any, direct oversight. While the Public Service Commission and local authorities are charged with strict oversight of public utilities and their services, 3rd-party actors may be avoiding backlash from excessive surcharges, e.g., "administrative fees", simply because they are not directly providing services that would subject them to utilities laws.

For example, under Water & Wastewater Systems: "'Utility' means a water or wastewater utility and, except as provided in s. 367.022, includes every person, lessee, trustee, or receiver owning, operating, managing, or controlling a system, or proposing construction of a system, who is providing, or proposes to provide, water or wastewater service to the public for compensation. Fla. Stat. § 367.021(12). The 3rd-party sub-metering companies and property management companies billing out allocated costs - that seem to tack on extra charges and provide no rate schedules as required of utilities - may be successfully scheming away due to the fact that they are not actually providing water or wastewater services; rather, they are simply providing "billing services" separate and apart from the underlying local or municipal water utility.

Additionally, the exemptions from statutory regulations relating to water utilities include: "Landlords providing service to their tenants without specific compensation for the service" as well as "Any person who resells water or wastewater service at a rate or charge which does not exceed the actual purchase price of the water or wastewater." Fla. Stat. § 367.022. I haven't gone to the depths of exhaustive research, but I suppose that in the context of those exemptions property management or sub-metering services could ostensibly bill for exactly the cost of the water/wastewater service but add any additional amounts for administrative types of fees so long as they are not specifically for water service, i.e. "reasonable" costs of administering the billing procedures and "reasonable" costs of doing business.