Water consumption – when is it charged to tenants?

Landlords and tenants will often ask when water consumption can be charged to tenants.

The Residential Tenancies and Rooming Accommodation Act 2008 requires 3 things in order for all water consumption to be charged to tenants.

  1. The property must be individually metered.
  2. The property must be water efficient.
  3. The tenancy agreement states the tenant must pay for water consumption.

We consider each of the above points and excess water when a property is not water efficient.

Individual metering

Properties are individually metered if the local water distributor has a separate water meter for the rented property.

Older unit blocks often have only 1 water meter for the whole building or complex.  Consumption is shared between all the units in the whole building and it cannot be charged to tenants.

Landlords who have water delivered by a vehicle in specified quantities may charge their tenants for that water.  It is common for rural residential properties without town water access to charge water consumption on that basis.

Water efficient

A property will only be considered water efficient where its water fixtures meet the required water efficiency standards:

Water efficient devicesMinimum standard
Internal cold water taps and single mixer tapsA maximum flow rate of 9 litres per minute
ShowerheadsA maximum flow rate of 9 litres per minute
ToiletsA dual flush function not exceeding 6.5 litres on full flush and 3.5 litres on half flush and a maximum average flush volume of 4 litres (based on the average of 1 full flush and 4 half flushes)

Only internal cold water taps installed over a hand basin, kitchen sink or laundry trough need to be water efficient. This includes single mixer taps. Other taps such as bath tub taps, outside taps, or taps which supply appliances such as washing machines or dishwashers do not have to be water efficient to meet the water efficiency standards.

Landlords should keep evidence of the property complying with the required water efficiency standards.  A plumber’s compliance certificate is generally the best method of proving a property is water compliant.

Tenancy Agreement

The tenancy agreement for a property must state if water consumption will be charged to the tenants.  Water cannot be charged to tenants if it does not.

The Entry Condition Report completed at the start of the tenancy should include an entry water meter reading.  This reading is used to calculate the proportion of consumption of the first bill for which the tenants will be responsible.

The Exit Condition Report should also include an exit water meter reading.  This reading is used as part of the exit procedure to calculate the water consumption for which the tenants will be responsible.

What happens if a property is not water efficient?

If a property is not water efficient, only excess water usage charges can be passed on to the tenants.

Excess water usage is water consumption over a “reasonable amount”.  This term is not defined in the Act and so it is best to agree on a reasonable amount at the commencement of the tenancy.

Reference points for calculating a reasonable amount can include:

  • if the water utilities provider has a “local area average”, consumption over the average may be agreed as excess water; or
  • if the water utilities provider has a 2nd tier charge, consumption falling to the 2nd tier may be agreed as excess water.

You should consider the water fixtures at a property so any method of calculating excess water usage is reasonable.

Large houses with lawns and gardens, a pool, a spa and multiple bathrooms will consume a lot of water.  It is generally not appropriate to charge excess water for all consumption over the local average.

Consumption in units is only likely to be related to use of water in the bathroom, kitchen and laundry.  Excess water calculated by reference to the local average may be appropriate.

Properties that are individually metered can often be retro-fitted to make them water efficient.  Queeslanders and other older houses can often be retro-fitted so tenants can be charged for all water consumption.

Conclusion

It is important for landlords and tenants to turn their mind to water consumption.

Tenants need to ask if water consumption will be charged and on what basis.  Pay attention to the entry and exit water meter readings. Chase your property manager if you don’t receive regular bills.

Landlords should ask your property manager if your property can be retro-fitted to achieve water efficiency.  You should arrange to have water bills sent directly to your property manager.

Looking to squeeze every drop out of your investment property?  Call Tony on 0401 902 628 or Sarah on 0418 770 946 today!

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