The Minnesota Legislature has been deliberating on Senate File 4579 (SF 4579) in hopes of improving tenant equity related to utility billing. The bill proposes significant amendments to the way utility services are allocated to tenants of residential properties for both submetering and ratio utility billing systems (RUBS).
Key Provisions of the Bill:
SF 4579 aims to ensure equitable distribution of utility costs among tenants by mandating specific formulas for the allocation of utilities, prohibiting the allocation of electric charges, prohibiting common area charges, limiting administrative fees, and setting guidelines for tenant rights and protections. Here is a summary of the key changes SF 4579 proposes:
- Submetering: Billing for individually metered usage for water, sewer, gas, and electric is still allowed
- Water/Sewer (RUBS): Apportionment of water/sewer charges is still allowed but must be allocated on occupancy
- Gas (RUBS): Apportionment of gas charges is still allowed but must be allocated on square footage and both the common area deduction and calculation must be shown
- Electric (RUBS): Apportionment of electric charges is prohibited
- Common Area: Billing of common area charges is prohibited
- Non-Usage Charges: If submetering a utility, all non-usage charges (i.e.: taxes, surcharges, fixed fees, credits, etc.) must be billed on a per-unit basis to all units
- Administrative Fees: Administrative fees not to exceed $8 per bill
- Late Fees: Late fees not to exceed $5 and must not be compounded
Tenant Rights and Protections:
One of the most tenant-favoring clauses in SF 4579 is related to billing errors and overcharges. The bill states that in the event a billing error caused an overcharge, the landlord is required to promptly credit tenants for the discrepancy with no time restriction. However, in the event a billing error caused an undercharge, landlords are only allowed to back-bill tenants up to six months, safeguarding tenants from sudden financial burdens due to past billing errors.
The bill also empowers tenants to request the last 12 months of historical utility charges for the building, prohibits the disconnection of utilities for utility non-payment, and prohibits the landlord from applying tenant utility payments toward outstanding rent, or from applying tenant rent payments toward outstanding utility payments.
Conclusion:
For residents and landlords in Minnesota, staying informed about the progress and final outcomes of SF 4579 is important as it will directly impact how utility costs are managed and divided in multi-family residential buildings. This bill represents a significant shift towards more regulated utility service management aimed to ensure fair, equitable, and transparent utility billing methods for tenants.
SF 4579 has passed through several legislative stages and is currently under review by a conference committee to resolve disagreement between the House and Senate versions. Stay tuned as this bill progresses through the legislative process, potentially changing the landscape of residential utility services in Minnesota. For more detailed information on the bill and its implications, please refer to the Minnesota Legislature’s official documents.
UMS has over 15 years of experience and is here to guide our clients through these changes to ensure accurate and informed billing. If you are interested in learning more about the services we offer, you can click the “Get a Quote” button below or call us at 877-934-4346 to speak with an expert.