Who Pays For What?

One of life’s certainties is the presence of bills, and unfortunately whether you are renting a property or leasing your investment property out, your situation offers no exception from this pesky truth.

Some bills are easily designated; for example, tenants must cover the costs of utilities. This includes electricity, telephone and gas charges. As you’d expect, landlords cover the remaining property taxes and council costs. This includes any associated land tax, council rates and additional corporate charges imposed by government bodies.

One bill that does have some crossover between the two parties is the water bill. Changes within the water-supply industry within the past decade have led to some confusion about water bills. This article aims to clarify who pays for what, and how to minimise the sting of large water bills.

The infrastructure component of a quarterly water bill includes a council charge for maintenance of sewerage and drainage. These charges firmly fall within the landlord’s responsibility, as they are essentially related to taxing property owners for the upkeep of infrastructure that the council invests in.

On the flipside, actual water consumption costs can be passed on to the tenant, if the property in question is kitted out with water saving devices, as outlined by the Australian Government in the Water Efficiency Labelling and Standards (WELS) scheme, or the landlord can elect to pay a reasonable portion of the consumption costs and invoice the tenant for the remaining amount.shutterstock_85678978

In a nutshell, WELS encourages property owners to invest in simple water-saving devices around the home, to assist with the conservation of water and minimise wastage. Australia’s temperamental climate sees us swing between flood and drought, and WELS measures are designed to counteract our unpredictable climate and encourage responsible conservation of our precious resource.

The standards WELS requires property owners to meet in order to pass on water costs to tenants are as follows:

  • Internal cold water taps (excluding baths) have a maximum flow of 9L/minute
  • Showerheads have a maximum flow of 9L/minute
  • Toilets have a dual flush function not exceeding 6.5L/minute for full flush, and 3.5L/minute for half flush

If these numbers boggle, it’s best to get a reputable plumber to inspect your property to ensure you comply and are legally able to pass on water consumption costs to tenants.

As a landlord, if your property doesn’t comply with these regulations, you will need to cover your tenant’s water consumption costs, except any costs over what is considered a reasonable amount. It is also important to note that the property must be individually metered to pass on consumption costs to a tenant. This means many unit and town-house complexes built prior to the mid 2000’s cannot pass on consumption costs to a tenant.

 

How To Keep Consumption Costs Down

With all of this in mind, it’s a great idea to consider which fittings or features in your property might be driving up consumption costs. A good plumber will be able to advise suggested improvements to your bathroom, kitchen and other wet areas at home that will assist in minimising water wastage and eventually reduce bills.

If you’re a tenant, it’s wise to consider your own water saving measures. Use a water tank if your rental property has one installed, choose drought–resistant plants where possible and report any leaky taps to your agent to get quick attention and minimise waste.