Compliance Alert
- RUBS (Ratio Utility Billing) is heavily restricted for water in new California construction
- All billing meters must be "type-approved" by CDFA and accurate to within 1.5%
- Tenants have the legal right to inspect meters and billing calculations
- Non-compliance can result in full refund of ALL utility payments collected
Understanding California SB-7
California Senate Bill 7 (SB-7), signed into law in 2016 and fully effective since 2018, fundamentally changed how landlords can bill tenants for water usage. The law was designed to promote water conservation by ensuring tenants pay for their actual usage—not estimates.
While SB-7 specifically addresses water submetering, its principles and the broader California Weights & Measures framework apply to all utility billing.
The Three Pillars of Compliance
Measurement Requirements
You must use a dedicated meter for each unit. The days of "splitting the bill by square footage" are numbered.
- Individual submeters for each dwelling unit
- Meters must be accessible for inspection
- RUBS (Ratio Utility Billing) is prohibited for water in buildings with permits after January 1, 2018
- "Estimated" or "calculated" usage without metering
Accuracy Standards
All billing meters must meet strict accuracy requirements set by the California Department of Food and Agriculture (CDFA).
- Type-approved by CDFA Division of Measurement Standards
- Accurate to within ±1.5% across normal operating range
- ANSI C12.20 certification (for electric meters)
- "Smart home" grade meters not certified for revenue billing
- Inverter-reported data (not from a dedicated meter)
Transparency Obligations
Tenants have explicit rights to understand and verify their bills.
- Tenants can request to inspect the meter serving their unit
- Bills must show actual meter readings (not just totals)
- Rate structure must be disclosed in writing
- Billing methodology must be documented and available
The Risk: What Happens if You're Non-Compliant?
Potential Penalties
If you use "Amazon-grade" WiFi meters that are not ANSI-certified, or if you use "estimated" billing software, a tenant can sue for a full refund of all utility payments made during their tenancy.
In class action scenarios, this liability multiplies across every unit in your building, every month of non-compliance.
Recent court cases have consistently sided with tenants when landlords could not demonstrate:
- The specific meter model and its certification status
- An unbroken audit trail of readings
- That no third party could have manipulated the data
The "RUBS vs. Submetering" Decision Tree
When was your building permitted?
RUBS may still be legal for water, but submetering is strongly recommended for legal protection and NOI optimization.
RUBS is prohibited for water billing. You must install individual submeters to bill tenants.
Compliance Checklist
Self-Audit Your Property
The Safe Path Forward
The easiest way to ensure compliance is to work with a licensed electrical contractor who specializes in revenue-grade submetering. They understand the regulatory landscape and can install systems that are:
- Certified to ANSI C12.20 standards
- Directly connected (no API dependencies)
- Fully auditable with local data storage
- Documented for legal defense
About this guide
This guide is general information about California submetering requirements, written from a licensed electrical contractor's perspective. It is not legal advice. Regulations change and their application depends on your building's permit history, unit count, and jurisdiction — confirm your obligations with your own counsel before changing how you bill tenants.
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