26 Sep RUBS Utility Billing in Los Angeles: 2026 Rules and What May Change
By Wolf Baschung, CCIM, CPM. Last updated September 2026. This article updates our earlier post on ratio utility billing.
Most older Los Angeles apartment buildings have one master meter for water and sewer, and often for gas. The owner pays one bill for the whole property. A Ratio Utility Billing System (RUBS) divides that bill among the units by a formula, such as square footage, number of occupants or number of bedrooms. It remains legal in California, but it is under more scrutiny than at any time since we first wrote about it, especially in Los Angeles.
The three ways to bill tenants for utilities
- Direct metering. Each unit has its own utility account. This is the simplest and lowest-risk arrangement, but it is often impractical or expensive to retrofit in older buildings.
- Submetering. The owner installs meters that measure each unit’s actual use. For water, California’s submetering law (Civil Code §§1954.201–1954.219) sets rules on disclosure, meter accuracy and billing, and caps administrative fees. Since 2018 most new multifamily construction must be built with water submeters.
- RUBS. The master bill is allocated by formula. No meters are needed, but the allocation is only an estimate of each unit’s use.
Rules that apply to RUBS today
- No profit. An owner may pass through only the actual cost of the utility. Adding a markup, or billing more than the master bill, creates liability.
- Disclosure before the lease. The method of allocation should be explained in writing before the tenant signs, and included in the lease.
- Existing tenants. If a current lease includes utilities in the rent, the owner cannot simply start billing for them. A change in terms requires the tenant’s agreement or a new lease, and for rent-stabilized tenants it can be treated as a rent increase or a reduction in services.
- Shared meters. If a tenant’s own meter serves any area outside the unit, Civil Code §1940.9 requires disclosure and a written agreement on how the cost is shared.
What may change in Los Angeles
In a December 2025 report, the Los Angeles Housing Department recommended banning RUBS for units under the Rent Stabilization Ordinance, with a path for owners to apply for a rent adjustment based on what tenants had been paying for utilities. For non-RSO buildings it recommended stronger disclosure, including tenant access to the master bills, but not a ban. As of mid-2026 the City Council’s housing committee had not yet taken the item up.
At the state level, a bill to prohibit RUBS for most utilities other than water and sewer (AB 1248) stalled in 2025 and could return.
What we recommend
- If you use RUBS, audit it: confirm the formula, confirm you bill no more than the actual cost, and make sure every lease discloses it.
- Keep copies of the master bills and the allocation for every billing period, so you can show tenants or LAHD how each charge was calculated.
- For RSO buildings, plan for the possibility of a ban. Know what RUBS brings in per unit so you can evaluate an adjustment application if the rules change.
- When renovating, price out submetering. It is more defensible than a formula and encourages conservation.
Related guides
- Los Angeles Rent Control (RSO): A 2026 Guide for Owners
- How We Build an Annual Operating Budget for Your Apartment Building
- How to Check If a Property Is Under the RSO
This article is general information, not legal advice. Rules in this area are actively changing.
Sources: LA Public Press: RUBS and the City Council (July 2026) · Apartment News: LAHD’s RUBS report · California Civil Code §§1940.9, 1954.201–1954.219