Multiple Legislative Efforts in Play Will Impact Tenant Utility Bills

Two initiatives moving through the General Assembly may mean significant changes for tenants, landlords, and developers.

House Bill 92 – In many jurisdictions in Ohio, unpaid water, sewer, or trash charges, which may be  incurred by tenants, can be certified to the tax duplicate and enforced as liens against the property. Ohio House Bill 92 would change that in certain ways.

HB 92 seeks to limit when and how unpaid water, sewer, or trash charges become liens on the property, and it would focus recovery on the actual user of the service rather than the property owner/landlord. If enacted, the Bill would reduce the likelihood that tenant-incurred utility debt encumbers the property, shift liability away from property owners in many leasing scenarios, and narrow the circumstances in which charges reach the tax rolls. HB 92 recently passed the Ohio House and has been referred to the Senate Local Government Committee.

House Bill 265 –  Sponsored by Representatives Sean Brennan and Tex Fischer, this newly-introduced Bill would require that the same rules be followed for bulk utility arrangements and submetering as traditional utilities, including justifying rates, providing clear and timely billing, following established disconnection procedures and dispute resolution, and offering consumer assistance programs.

A unanimous Ohio Supreme Court decision recently affirmed that submetering companies function as utilities and are subject to regulation. That ruling initiated a new regulatory mechanism where state officials must apply consumer protections and cost controls to submeterers. Representative Brennan called the Supreme Court ruling a major endorsement of HB 265, which is under consideration by the House Energy Committee.

Both bills will have major implications for  the commercial real estate development industry, as well as commercial real estate ownership and property management companies.