Karen Stehr Property - leading the way in property management on the Sunshine Coast
The cost of water has grown to be a hot topic, from thoughts of "water comes from the sky, why should we have to pay for it - especially when our dams are so full" .... to the local councils who seem to want to increase the extra fees attached to water consumption so that the connection, sewerage and fixed charges are more than the water itself... and then the topic of ... "is the property water efficient or not?"
Allow me to answer a few frequently asked questions from both investors and tenants.
As an investor am I able to forward the Unity Water Bill to my tenant to pay?
NO. The Unity Water bill will always remain in the name of the property owner and whilst an owner is able to recoup some of the cost outlined on the Unity Water Bill, the entire bill must be paid in full by the owner of the property.
What part of the Unity Water Bill does an owner have to pay?
An owner of a property with a tenant in place is responsible to pay any charges relating to sewerage. In order to rent out a property you must meet the needs of an occupying tenant and provide the means for basic hygiene as part of ensuring a property is habitable for someone to live in. An owner must also pay for any access charges - fixed access, water access and sewerage access. These charges under current legislation are not chargeable to a residing tenant.
What part of the Unity Water Bill does the tenant have to pay?
The tenant must pay the State Bulk Water Price and water variable usage charges up to 100% only if the property IS deemed water efficient. Only a % of the water used can be charged to the tenant if the property is NOT water efficient. Charges can only be applied to a property that is individually metered. A tenant does not have to pay anything at all if the property is not individually metered.
What does individually metered mean?
If the property is a stand alone house it would be individually metered. If the property is a unit, duplex or townhouse, it may be on a shared meter for the entire building or complex. If this is the case, all units may pay an equal % of the Unity Water account. For example - If there are 4 units in the block and the Unity Water bill is say $800.00 for the complex, each unit owner would be charged $200.00 for their unit regardless of how much water the occupant has used. As there is no way to accurately measure what an occupying tenant may have consumed in water, the tenant can therefore not be held responsible to pay for any water.
Water does water efficient mean?
If a property has been deemed water efficient, it means the property has met the guidelines set out by council and therefore holds a WELS 3 Rating. To hold a WELS 3 Rating the property has been audited and moderators are in the required locations in order to ease the flow of water and allow the property to be more water efficient. For example, if you turn on your shower and an abundant flow of water comes out the shower head, chances are the property is not water efficient. If you turn it on and get a soft trickle of water, it is likely the property is water efficient and a moderator is in place. A plumber can be engaged to audit your property if you are not sure whether your investment is water efficient or not, at minimal cost.
If my property is not water efficient can I still charge the tenant for water?
YES, as long as this has been specified on the tenants Form 18 Tenancy Agreement and the % agreed to by the tenant. A best practice method has been adopted by most real estate agencies to charge the tenant for anything over the amount of 50KL per cycle. 50KL was deemed ample for a standard family hygiene functions, shower, toilets and personal use. Anything over 50KL is excessive. I utilise this calculation to charge excessive water. I adopted this method as a guideline from the local council as many years ago the council used to only charge excess water to owners, at a rate of anything over 90KL per cycle. I took into account fixed charges, sewerage etc... and reduced the level considered excessive from 90KL to 50KL which I believe is fair to all parties. An owner is not left with a huge water bill and a tenant becomes conscious not to use too much water.
How does the tenant get charged?
The process is simple, the owner pays the Unity Water bill - forwards to the agent to calculate the tenants portion and the agent invoices the tenant. The Unity Water bill copy is also forwarded to the tenant less the owners personal information. The tenant pays the invoice to the agent trust account and funds are then deposited to the owner. However, current legislation allows the tenant 30 days to pay an invoice for water services to the property .
What time frame does an owner have in order to pass on the cost of water used?
My recommendation would be to forward the Unity Water bill to your agent as soon as you have paid it. Do not leave it for a few months later or even a year later, or for when the tenants vacate the property. Whilst there is no legislation in place that states any time frame, if more than 2 water cycles go by without a tenant being charged for water, it is considered the owners intention is not to charge. If a tenant suddenly receives 12 months worth of water invoices, they may have grounds to challenge this charge through the Queensland Civil and Administrative Tribunal.
In summary, water is so abundant at the moment, yet such a complicated issue when it comes to property management. If not managed well, you can potentially find yourself losing out on money, or in a dispute that is really not necessary. The best thing to do is talk to your property manager about your particular property and how to best handle the distribution of water costs.
M: 0417 618 480