Water Utility Policy For Tenants & Landlords In California

Most California landlords handle the water utility and account for it when setting the base rent price for a unit or building, to avoid legal issues if a tenant moves out with past-due bills.

However, there is no regulatory requirement that the water bill be maintained by either party. Therefore, your lease should state exactly which party is responsible in your specific rental.

If water service and other utilities are not handled explicitly in your lease, do not sign until this is corrected.

Who Is Responsible For The Water Bill In California?

While there are obligations under California law regarding gas and electricity 1, water and sewerage are not included in this legislation and thus, there’s no legal requirement for the landlord or the tenant to pay the water bill.

However, if the bill doesn’t get paid, the water will eventually be disconnected. So, it is important to come to an understanding of who will pay the bill and ideally, you want to do this before you sign a lease or move into the property.

One of the reasons that there is no legal position on the provision of water as a utility is because water companies in California are not one giant conglomerate (unlike electricity and gas which are provided by a single company) and are, in fact, smaller entities and each one is typically managed by the city or municipal authorities.

Is it Standard In California For the Landlord to Handle Water Utilities?

The vast majority of landlords in California will elect to have water, sewerage and trash collection included in the rental payment (as you will see a little later this is, in part, to protect their overall legal position).

They may or may not include gas and electricity in the contract, depending on the metering of the building and how many units share lines. As for internet, cable, and security, the tenant is almost always responsible for these “non-essential” services.

However, just because these are the standard positions that doesn’t mean that you can rely on this “rule of thumb” when making a decision over where to rent in California.

The Tenant’s Responsibility Is In The Leasing Contract

The ultimate arbiter of a tenant’s responsibilities, particularly in the case of water costs which are not covered under other utility legislation, is the leasing contract that you sign before you move in. There is no better way to determine what you are liable for, than by referencing this document.

If the contract does not specify whether the landlord or tenant is responsible, you can probably assume that the tenant will end up footing a particular bill. After all, it’s you – the tenant – who will suffer when the water is cut off for non-payment.

This means it’s very important to go through a leasing contract with a fine tooth comb and work out whether there are any unforeseen fees and charges hiding in there.

It is worth noting, however, that no matter how the contract is set up – you are protected from price gouging in California and the landlord cannot charge you more than the cost of the bill plus a small admin fee for taking care of it for you.

Though, given that most contracts will not include a price breakdown that singles out the water utility bill, it seems unlikely that you’d be able to enforce this and your best guide as to whether the charges are fair is to check to see if similar properties rent for a similar amount of money in the neighborhood.

If You Are Paying the Water Bill, You Will Need to Establish or Transfer the Account to Your Name

Another reason that landlords like to keep control of the water account in a property is that it can be tedious to transfer it between individuals.

Then, of course, there’s the fact that it’s vital that during the winter months that the water continues to flow around the system – if it’s cut off, the absence of water can cause severe damage to pipe systems within the home.

However, if it’s your responsibility to pay under the contract, then you will need an account with the city water authority. That may mean opening a new account or if you’re moving from somewhere currently within the remit of the same water company, you might need to transfer your existing account.

You may need to discuss what happens when you vacate the property and how the account can be transferred back to the landlord as you won’t want to retain liability for bills once you move out.

Can My Landlord Charge A Premium For Water If They Pay?

In theory, they can charge a small fee for admin but they cannot levy any substantial premium on the bill from the utility company.

If the landlord pays for a utility, they are required to pass on the same bill plus a “small fee” which is limited by law to the cost of the utility company managing the same account.

However, in practice, as we’ve already noted – it is unlikely that the water costs will be broken out as a line item if it is included in the rent. That means that the landlord may be charging a premium on the bill and one that you cannot dispute in a court.

In most cases, what prevents the landlord from getting greedy in these circumstances is that you can ascertain the market rate for rental properties in the area and roughly calculate whether any included utilities are being fairly priced.

Who Has To Fix A Water Leak in California — Tenant or Landlord?

In all circumstances, unless specifically noted in the leasing agreement – the landlord should be responsible for all costs regarding leaks and other water related damage and disasters.

However, this applies only to the cost of fixing the water service and the property and not to any items that are damaged as the result of such a leak. For items damaged by a water leak such as a laptop or furniture, you need household or “renter’s insurance.”

What Happens If A Tenant Moves Out Without Paying A Water Bill?

One of the reasons that California rentals commonly include the water bill in rent is that there is no clear legal position on the ownership of the bill or responsibility for unpaid fees. 2

You’d think that having the bill in a tenant’s name would mean that they would retain the responsibility for the unpaid amount (this is, after all, how most other utility bills work). Suprisingly, this is not the case in California.

Municipal authorities can, and have in the past, held landlords liable for the outstanding water bill and it is a fairly common situation for the city to take out a lien on a property when the landlord fails to pay up. This isn’t an insignificant thing to happen as, over time, a lien can actually end up with the landlord losing their property in court.

In one incredible case, the city council of Hanford, here in California, decided that they would go to court to force landlords to take over $35,987 of unpaid water utility bills. 3 They argued that the cost of allowing these bills to be written off was over $100,000 and that tenants who did pay would have to shoulder the cost if landlords didn’t pay up.

In the end, the court decided that this would impose too much hardship on the landlords, but you never know when the lawyers might try again.

So, in most cases, you’ll find that the landlord expects water to be paid as part of the rent because it protects them from suddenly being pursued for a large water bill that the tenant should have paid… but didn’t.

Conclusion: Water Utility Responsibility Should Be Defined in Leasing Agreements

Who is responsible for the water bill in California? Most commonly, the landlord will handle it as part of the rent. We cannot stress enough that you should always read and fully understand what your obligations are contractually before signing a lease.

However, one thing you should be aware of is that you are not responsible for the cost of fixing water leaks unless you specifically agree to do so as part of the contract. Agreeing to fix wear and tear or environmental damages is not normal, and you should not sign a lease requesting this unless you have a special agreement with the landlord for your trouble — such as reduced rent.

Page Summary
  • Water utility responsibility is normally handled by the landlord as part of rent. However, this is not required by California law — in fact, landlords usually opt to cover water to avoid being stuck with a legal liability if the tenant assumes responsibility for water but fails to pay for an extended period.
  • Your lease agreement should include a statement as to how water is handled and who is responsible for maintaining the account with your local water utility.
  • Fees for water utility are not required to be broken out as a line item on your lease fees in California. It is normally bundled in with rent, but in some cases will be broken out as a monthly fee which varies based on usage.

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Last Update: May 19, 2020
Published: April 19, 2020
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