Condo Water Submetering Does Not Guarantee Lower Common Fees

M.B. from outside of Connecticut writes:

Dear Mister Condo,

My condo fee includes water. The Association wants to install individual water meters for us to pay for our own water but does not want to reduce our condo fee. Shouldn’t that percentage of the condo fee come back to us now that we pay our own water bill?

Mister Condo replies:

M.B., the decision to submeter water is gaining in popularity and makes perfect sense for many associations. Of course, the approval to move from an included amenity to a paid amenity usually requires a vote of the association unless the Board has the authority under the governing documents to make the decision. Once the decision has been made and properly voted upon, the submetering begins and the association is no longer responsible for providing the amenity. The reconfiguration of the budget and common fees resulting from this line item being removed from the budget is an entirely separate matter and one that should be addressed at next year’s budget approval time. In theory, lower common expenses to the association should result in lower common fees to individual unit owners. However, as you know, there are many other items that make up the annual budget. Just because the line item for water expense is diminished, there is always the possibility of another line item (insurance, for instance) increasing which could easily offset the savings from water submetering. In other words, the two items are not strictly related, Common fees are set as a result of total expenses, Reserve Fund contributions, etc.. The water expense is just one line item on a larger list of expenses. Be sure to keep a close eye on next year’s budget proposal and common fee schedule. If there is an opportunity for savings, that is likely where you will see it. All the best!

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