The Running Toilet Book: Chapter 5 — No Such Thing as a Free Lunch (LeakBird)

Apr.23, 2009 in Running Toilets, Water Bills

There’s no such thing as a free lunch.
Milton Friedman

It can be said that we don’t value what we don’t pay for. To tenants who don’t foot their units’ water bills, a running toilet may only mean a minor audible nuisance. To a landlord or property manager, a running toilet means a higher water bill and potentially many more higher water bills in the future.

There are two methods for making a tenant value a running toilet:

Annoy them in some way, eliciting proactive action
Hit them in the pocketbook, that is, make them pay for it

Chapter 6 will talk about #1 in further detail, but we’ll keep this chapter devoted to #2, which means it will be short and sweet.

Running toilets, of course, wouldn’t be a problem to landlords and property managers if they could all put them immediately and directly into the names of their tenants. There are a number of reasons they can’t do this so easily, if at all, but for purposes of this discussion, we’ll confine ourselves to two reasons:

Legal Matters
Metering

Legal Matters

Who pays for water often boils down to the lease agreement (no pun intended). Because every municipality has slightly different landlord-tenant law, it’s best to get to know how yours works. More often than not, however, water bill payment is factored indirectly into the amount of rent the tenant pays each month. And it can be legally thorny to have your tenant directly responsible for water bill payment if you’re responsible for the property and all associated maintenance costs and property taxes. That’s why it’s easier to simply build the cost of water into the rent you charge your tenants.

Some tenants get charged a flat rate for water, which makes it impossible to make them responsible for a running toilet which tripled the water bill. Another factor to consider is that in order to stay competitive landlords usually have to build water uage into their rents, to keep vacancies low and remain in business. In other words, if everyone in a certain city does things one way, that is, builds the cost of water into the rental rate, it’s difficult to do the opposite and be as competitive in that particular real estate market.

There’s also the idea of the establishment of legal precedence. In other words, if a lease agreement is already in place with your tenants, it’s very difficult, if not downright illegal, to suddenly change the rules on your tenants. Plus, it won’t make them very happy, and vacancies may climb.

What all of these legal matters add up to is the sheer, unwanted difficulty of having tenants pay for their own water, no matter how much burden it would remove from your own financial obligations as a property manager or landlord.

Metering

Making it even more difficult to hold tenants directly accountable for water usage, 95% of all residential buildings across the US are not individually metered for water usage (other terms and spellings for this are “submetered”, “sub-metered” or “sub metered”), but master metered, rather.

Because the landlord or property manager has no hold over the amount of water consumption for each tenant, they cannot hold their tenants accountable for any deviations in water usage, even after they’ve narrowed a running toilet issue down to a particular unit via correlation and correction of the problem.

Besides, landlords and property managers are responsible for maintenance of all appliances and fixtures, as well. But this can get tricky when a tenant has been utterly negligent (or vice versa). Obviously, negligence harms the landlord or property manager most, because they’re the ones who are 95% of the time directly paying the water bills!

It’s different in an area like Boston, where tenants more often than not pay their own water bills. Boston, of course, being one of the more densely contained markets in the country, is also a unique market climate, with laws and feature all unto itself. Not to mention the fact that most residential properties in Boston are individually metered for water, which makes flat rates unnecessary and brings accountability to water usage for residential customers.

Of course, a property manager or landlord can always choose to individually meter their buildings in order to transit over to tenant accountability, but this is a time-consuming and expensive task, requiring much expertise on the part of a chosen submetering company.

Summary

Upon summary, we can say that method #2, that is, hitting tenants in the pocketbook for running toilets, in other words, making them directly pay for their own water usage, in order to hold them accountable in the event of an inevitable running toilet, is not a viable option for avoiding running toilets for most landlords and property managers:

First, it’s legally thorny if not a downright threat to business competitiveness.
Second, the fact that most residential units aren’t already individually metered, an expensive and time-consuming feature to implement, makes it impossible to hold tenants accountable for their water usage anyway.

There must be another way.

Well, that would be method #2, that is, annoying your tenants to a proactive response.

To finish off this chapter, I’d like to draw a connection to the opening quote by Mr. Milton Friedman: There’s no such thing as a free lunch.

Although the point may seem subtle, we can say that tenants are actually already indirectly paying the cost of water because it’s built into their rent. This means it’s not their responsibility. However, they can play an important part in the process of solving the problem of the running toilet, which is what this book is all about.

In other words, their water usage is not free, although many argue that this is the case. What we need is a system upon which property managers and landlords can rely, in order to bring down the cost of such an often expensive lunch, i.e., the running toilet.

Toilets may run, but they can be prevented from running for very long.

In fact, maybe this is a lunch for which they should be paying very little, or anything at all.

If you are interested in How You Can Increase Your Cash Flows by $2,500.00 Every Year and Never Pay for High Water Bills Due to Your Tenants’ Running Toilets, sign up for our Free Report here.

Abendigo Reebs is the VP of Business Development for LeakBird Industries LLC in San Francisco, CA. He may be reached at by email at jordan@leakbird.com

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