What Are California’s Shared Water Meter Laws?

California’s shared water meter laws are built around a 2016 statute, SB 7, that added Water Code Section 537.1 and Civil Code Sections 1954.201 through 1954.219. The short version: multifamily buildings whose water service application was submitted after January 1, 2018 must measure each unit’s water use, and any landlord who bills tenants separately through submeters, whether required to or not, has to follow strict disclosure, equipment, and billing rules. Older buildings on a single master meter can keep allocating water costs by formula, but that method has its own limits.

When Submeters Are Required

Water Code Section 537.1 tells water providers to require per-unit measurement as a condition of new service to a multifamily residential or mixed-use building whenever the application for that connection was submitted on or after January 1, 2018.¹ Measurement can come either from individual meters the water provider installs or from submeters the building owner installs and reads. The owner carries the installation responsibility unless the provider agrees to handle it, and the provider cannot charge an extra capacity or connection fee for owner-installed submeters.

Existing multifamily buildings with one master meter and no submeters do not have to retrofit. But the moment a landlord in an older building voluntarily installs submeters and uses them to bill tenants separately, the full disclosure and billing framework in Civil Code Sections 1954.201 through 1954.219 applies to that property.² The law follows the billing method, not the building’s age.

A narrow legacy exception exists for submetering systems that measure only part of a unit’s water (hot water only, for instance) and were placed in service before January 1, 2018. Those partial systems fall outside the submetering chapter.²

What Counts as a Compliant Submeter

Not every device that measures water flow qualifies. Civil Code Section 1954.203 sets four conditions a submeter has to satisfy before a landlord can bill through it:

It has been inspected, tested, and verified for commercial purposes under state law, including Business and Professions Code Section 12500.5.
It measures water only for the exclusive use of a single unit, and only water going to an area within that tenant’s exclusive possession and control.
The tenant can access and read it, and the landlord can read it without entering the unit. Submeters installed before January 1, 2018 get an exception allowing in-unit reads with proper notice.
It is reinspected and recalibrated within the intervals set by law or regulation.

A submeter that fails any of these tests cannot be used to bill a tenant.³

Installation has its own gate. The work must be done either by a contractor licensed by the Contractors’ State License Board who employs at least one journeyperson from a state-approved apprenticeship program, or by a service agency registered with the Department of Food and Agriculture.¹ Hiring outside those categories puts the entire billing arrangement at risk.

Disclosures Landlords Must Give Before Billing

A landlord who plans to bill separately for water has to hand the tenant written disclosures before the rental agreement is signed. Civil Code Section 1954.204 requires them to appear in at least 10-point type, either inside the lease or as a separate addendum.⁴ The disclosures cover how charges are calculated, the basis for the billing, and the tenant’s right to dispute a submeter reading.

Tenants also have to be told how the dispute process works. If a reading looks wrong or the submeter seems broken, the tenant notifies the landlord in writing and asks for an investigation. If that doesn’t resolve things, the tenant can contact the local county sealer for an independent test, and the sealer’s contact information has to be in the disclosure itself.²

These disclosure rules apply both to buildings where submeters were required at construction and to any property where a landlord voluntarily uses submeters for tenant billing.

Ratio Billing in Master-Metered Buildings

Older buildings on a single master meter often use a ratio utility billing system, commonly called RUBS, which divides the total water bill among tenants by unit square footage, occupancy count, or a mix.⁵ California is deliberately neutral on the practice. Civil Code Section 1954.216 states that nothing in the submetering chapter creates a policy for or against ratio billing.²

The functional difference matters. Submeters measure actual water going to a unit, so tenants pay for what they use. RUBS estimates through formulas, which can leave a single occupant in a large unit or a careful water user paying for a neighbor’s habits.

RUBS is not unregulated in practice, though. The allocation method should be reasonable and clearly described in the lease. California’s Attorney General has pursued landlords who used ratio billing to slip in what amounted to hidden rent increases.⁶

Leaks, Malfunctions, and Billing Caps

Civil Code Section 1954.210 protects submetered tenants from paying for water losses they didn’t cause. When a leak, a broken fixture, or a malfunctioning submeter drives up a reading, the statute imposes hard caps:

If the landlord doesn’t fix the problem within 21 days after the tenant reports it, or within 21 days after the landlord otherwise learns of it, water charges for the unfixed period drop to $15 per month or actual usage, whichever is less.
If submeter readings from before and after the problem are available, the landlord can instead cap charges at $0.50 per day or actual usage, whichever is less.
If the problem is still unfixed 180 days after investigation, the landlord cannot impose any further water charges until the repair is completed.

These caps trigger automatically once the time thresholds are crossed.²

Buildings Exempt From the Submeter Mandate

Water Code Section 537 lists categories of buildings that don’t have to install submeters at all:

Buildings financed with low-income housing tax credits, tax-exempt bonds, or government loans where at least 90 percent of units are set aside for lower-income households under a regulatory agreement.
Housing at a place of education as defined in the California Building Standards Code.
Long-term health care facilities as defined in the Health and Safety Code.
Timeshare properties as defined in the Business and Professions Code.
Residential care facilities for the elderly as defined in the Health and Safety Code.

The exemptions reflect building types where residents don’t control their own water use or where a separate regulatory scheme already governs the arrangement.⁷

Gas and Electric Shared Meters Are a Different Statute

The water submetering chapter does not govern shared gas or electric service. Civil Code Section 1940.9 handles the situation where a tenant’s gas or electric meter also serves areas outside their unit, such as hallway lighting or a shared laundry room. Under that statute, the landlord must disclose the shared metering before the tenancy begins and either reach a written payment agreement with the tenant or make an alternative arrangement, like becoming the customer of record. A tenant who never got the required disclosure can sue, and a court can order the landlord to take over the account and reimburse payments that covered areas outside the unit, going back to the date the disclosure obligation first arose.⁸ Section 1940.9 does not apply to water.

What Enforcement Looks Like

The submetering statutes don’t publish a fine schedule, but the exposure for a landlord who cuts corners is real. Tenants can sue for reimbursement and billing adjustments when a landlord skips required disclosures, uses a non-compliant submeter, or ignores the leak-repair billing caps. The 180-day rule in Section 1954.210 is the sharpest tooth: a landlord who lets a water problem sit for six months loses the right to charge for water at all until the fix is done.

State enforcement has focused on utility billing used as disguised rent. The Attorney General secured a settlement against a property management company that used ratio utility billing to impose fees functioning as undisclosed rent increases.⁶ Federal consumer protection law can also reach these practices. In 2026 the FTC finalized an action against Invitation Homes over mandatory, undisclosed utility management fees that tenants couldn’t opt out of; the settlement required $48 million in consumer compensation and clear disclosure of all leasing costs going forward.⁹

1
California Legislative Information. California Water Code WAT 537.1
2
California Legislative Information. SB 7 Housing Water Meters – Enrolled
3
California Legislative Information. California Civil Code CIV 1954.203
4
California Legislative Information. California Civil Code CIV 1954.204
5
California Legislative Information. California Civil Code CIV 1954.202
6
California Office of the Attorney General. Attorney General Bonta Announces Settlement over the Use of Utility Fees as Shadow Rent Increases
7
California Legislative Information. California Water Code 537
8
California Legislative Information. California Civil Code 1940.9
9
Federal Trade Commission. FTC Sends Checks Totaling More Than $47.2 Million to Consumers Deceived by Invitation Homes Undisclosed Fees