Is Submetering Legal in California?
Last reviewed by NES Editorial · September 2026
Yes. Submetering is legal in California, and new multifamily construction must be submetered. Here is what the rules require and the cities NES serves.
Submetering pays for itself at most California properties. Residents are billed for what their unit uses, consumption drops, and the owner stops absorbing the master-meter bill. New multifamily construction has to be submetered, and NES handles that end to end. NES has done the installs, daily reads, and resident billing in-house since 1968.
From an NES case study at a 337-unit apartment community once about half of residents were submetered. Results vary by property.
Local submetering guides in California
NES serves communities across California. These areas have a local guide to start with.
Properties NES submeters in California
- Apartment communities
- Condominiums
- Townhomes
- Mobile home parks
- Student housing
Submetering laws and rules in California
- Water submetering and billing are governed by California Civil Code Chapter 2.5 (Section 1954.201), in effect since January 1, 2018, and new multifamily buildings permitted on or after that date must have a water submeter for each unit under SB 7
- Residents are billed for their measured water use, and the owner may add a billing or administrative fee capped at the lesser of $4.75 per unit (adjusted yearly for inflation) or 25% of the water usage charge
- RUBS (ratio or formula) billing in California is a water and sewer option only, with restrictions, and is not allowed for electricity or gas, so those utilities are billed on submeters at the utility's own rate
- Submeters must be readable without entering the unit and must be reinspected and recalibrated on schedule, with tenant disclosures and a path to county sealer testing for disputes
- For electric and gas, a master-metered owner who submeters must charge residents the same rate the utility would charge directly, with no markup, under CPUC rules and Public Utilities Code Section 739.5
- NES tracks the Civil Code and CPUC requirements so your property stays compliant
Local rules can vary by city and county, and some cities set their own requirements, which NES verifies for your exact address.
Official sources: California PUC · Civil Code 1954.201 (SB 7) · Pub. Util. Code 739.5 · City of Alameda Rent Program
General information only, not legal advice. Confirm current rules with the CA Civil Code · CPUC or a qualified attorney.
Submetering in California
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