Is Submetering Legal?
Last reviewed September 2026NES Editorial, checked by the Billing & Compliance team
In most states, yes. Submetering is legal across most of the country, though the rules vary by state, county, and city.
Is submetering legal?
In most of the United States, submetering is legal. Many states allow water, gas, and electric submetering, and several now require water submetering in new multifamily construction. The rules vary by state, county, and city: some cap the administrative fee, some require billing at the utility's rate with no markup, and a few cities restrict certain methods. Residents generally must be billed for their measured use, with the lease disclosing the billing. Because the requirements change and differ by location, NES has an in-house compliance team that verifies the rules for your exact address before billing starts.
What the rules usually require
- Residents are billed for their measured use, not more than the utility's cost
- The lease must disclose how utilities are billed
- Some states cap administrative or billing fees
- A few cities restrict certain billing methods
- Water meters generally must be tested for accuracy before they go into service
How the rules differ by state
Submetering is legal in most states, but the details vary. In Texas, water and sewer submetering is regulated by the Public Utility Commission of Texas under 16 Texas Administrative Code Chapter 24, and owners must register before billing residents. Georgia requires water submetering in many new multifamily buildings. California owners bill residents at the utility's rate, with no markup on the water itself. The Civil Code does allow a small billing fee, capped at about $4.75 per unit or 25 percent of the usage charge, whichever is less. Florida regulates water and wastewater submetering through the Florida Public Service Commission and limits what residents can be charged. Electric submetering tends to be the most regulated, and a few states require approval before an owner can bill residents for electricity. Local rules in some counties and cities, such as Miami-Dade, add registration or billing requirements on top of the state rule.
Rules vary by location and change
Because submetering law differs by state, county, and city and gets updated, the safe step is to confirm the current rule before you install and bill. NES keeps an in-house compliance team that tracks the requirements for each location and sets up billing to match, so you stay compliant. This page is general information, not legal advice.
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