As utility rates fluctuate and conservation pressures rise, more properties are billing residents for their utility use. If you are considering putting a resident utility billing program in place, there are several things to consider to ensure that the transition is smooth and your residents remain happy. Thinking through the resident experience – both before and after the roll-out of a new billing plan – is essential for a successful implementation. Here are some best practices to consider to make the utility billing process seamless for residents.
Determine How Charges Will Be Calculated and Update Lease Agreements Accordingly
Property owners need to decide on the infrastructure that will measure residents’ utility usage. Will you install submeters, which track the precise utility consumption in each unit? Or will you utilize your property’s existing master meter and calculate usage via RUBS? RUBS stands for Ratio Utility Billing System, and allocates usage to each resident based on a mathematical formula. The formulas are based on factors such as square footage, number of occupants in each unit or some other relevant factor.
When determining which billing method will work best for you, it is important to understand the rules and regulations for your state and municipality, which can be extensive and often confusing. Failure to comply with the regulations can lead to heavy fines and penalties. To learn more about the pros and cons for both submeters and RUBS, and the nuance of the regulatory environment, refer to our blog 4 Steps to Start Recouping Utility Costs from Residents.
At PayLease, we understand that compliance can be a scary and daunting aspect of billing your residents and we have a number of resources to help. Our industry and compliance expertise is invaluable in navigating the nuances of the rules and regulations.
Update Lease Agreements
How you plan to bill residents for utility usage needs to be clearly disclosed in their lease. It is often a regulatory requirement, as well as an industry best practice and a smart way to avoid resident confusion. The disclosure should explain the billing methods and any applicable fees. Any changes to an existing lease agreement (pertaining to utility charges) should be outlined in a signed addendum. Residents must also have sufficient written notice in accordance with the lease terms when changing billing methods or fees. Again, the regulatory requirements for the notice period vary by location, so it is important to be mindful of the timing when considering how to roll out your program.
Communicate the Change Effectively
As with all changes, communication is key. Residents need to understand when the change is taking place and how the billing will be calculated. If you were charging a flat fee for utilities previously and moving to submetering, this change can be a great opportunity to promote the benefits of charging residents based on a more analytical usage-based model. They will be able to see how their utility consumption directly impacts their bill, which leads to a sense of ownership and power over their monthly costs. This level of control is not only good for residents, it’s good for the environment, leading to increased conservation. Even when switching to an allocation method (RUBS), residents are incented to consider utility usage more than in a flat fee model.
After-Rollout / Ongoing Management
Ensure Resident Bills Are Clear and Accurate
Residents can get frustrated if they receive multiple bills (one for rent, one for utilities, one for ancillary charges such as pet fees, etc.) or if they receive one bill with a variety of charges that are not itemized. The ideal situation is providing one comprehensive, convergent bill that includes all monthly charges clearly itemized. As an added bonus, the bill can also tie to your payment provider enabling residents to pay online directly from their device.
An additional benefit that some third-party providers such as PayLease offer is the opportunity to communicate with residents on their billing statement. This is prime real estate for sharing conservation tips, lease reminders and other pertinent community information.
Keep the Conversation Going with Exceptional Service
Finally, offering exceptional customer service is key to keeping residents happy. As residents receive their bills they may have questions about how charges were calculated or what certain fees are for. If you work with a partner for your resident billing, they can supplement your staff in offering phone support to residents. This not only saves your team time, but also provides a knowledgeable resource for residents to quickly and easily get questions answered.
Keeping the lines of communication open and offering exceptional service are important in any scenario, especially when you are working hard to keep your property occupied and resident satisfaction scores high. A good partner can facilitate a smooth transition to a new utility billing paradigm and supplement your staff to reduce the administrative burden, thus ensuring your resident experience is optimized and positive.
If any of these seem like daunting tasks, contact PayLease for guidance. We’re happy to put together a personalized action plan for your company to improve resident communication and service.