Is Ratio Utility Billing (RUBS) Still Legal for California Rentals in 2026?

Published July 15, 2026

Yes, RUBS survived. A bill that would have banned most of it died in the legislature in February 2026.

Ratio utility billing (RUBS), charging tenants a share of a building's water bill based on square footage or occupancy rather than a meter, remains legal in California as of mid 2026. Assembly Bill 1248, which would have banned most RUBS arrangements, died on the inactive file on February 2, 2026. The separate rule that is firmly in effect, Civil Code section 1954.201 et seq. (SB 7), caps billing and administrative fees only for properties that install individual submeters, at the lesser of $4.75 (adjusted annually for inflation since 2018) or 25 percent of the amount billed.

Two different laws, easy to mix up

We get asked constantly whether RUBS is going away in California, and the confusion is understandable because two different bills have been in play. SB 7, passed back in 2016, governs properties that install actual water submeters for each unit, it is codified starting at Civil Code section 1954.201. Separately, Assembly Bill 1248, introduced in the 2025 to 2026 session by Assemblymember Matt Haney, would have banned RUBS outright for most fees and sharply restricted it even for water and sewer. AB 1248 did not become law. It was heard in the Assembly Judiciary Committee, never got a floor vote, and was ordered to the inactive file at the author's own request on February 2, 2026. If you read an article online claiming California banned RUBS this year, it is describing a bill that never passed.

What SB 7 actually requires, if you submeter

If your property has submeters measuring each unit's actual water use, and you bill tenants for that usage, SB 7 requires the submeter be independently tested and calibrated, be readable by the tenant without landlord assistance, and measure only water supplied exclusively to that unit. Any billing or administrative fee you or a billing agent charge on top of the actual usage cost is capped at the lesser of $4.75 or 25 percent of the amount billed, with that $4.75 figure adjusted each year for the California Consumer Price Index since January 1, 2018. This cap exists so landlords cannot turn a submeter program into a profit center.

What applies if you use RUBS instead of submeters

RUBS, allocating costs by square footage, occupancy, or a similar formula rather than an actual meter, is defined in Civil Code section 1954.202 but is not subject to the same fee cap scheme, because there is no individual metered usage to calculate a percentage against. That said, general landlord-tenant principles still apply: any pass-through charge has to be disclosed in the lease, cannot be structured to let the landlord profit beyond actual utility costs, and should be documented so a tenant can see how their share was calculated. Several South Bay cities also have local rent stabilization ordinances that treat certain utility pass-throughs as a rent increase for calculation purposes, so a RUBS charge that looks fine under state law can still trip a local ordinance.

What almost changed, and could again

AB 1248 would have limited RUBS to water and sewer only, required landlords to back out common area usage before dividing the remaining cost among units, and imposed new tenant disclosure and inspection rights. The bill's author acknowledged more work was needed and set it aside for the year rather than forcing a floor vote. Given the current renter protection climate in Sacramento, we would not be surprised to see a similar bill reintroduced in a future session, so this is worth rechecking annually rather than treating today's answer as permanent.

What this means for you

If you currently use RUBS at a South Bay property, you are not violating state law by continuing to do so, AB 1248 did not pass. But keep your lease disclosure language current, keep your allocation formula documented, and check your specific city's rent control rules since some treat utility pass-throughs differently than the state does. If you install submeters instead, remember the $4.75 or 25 percent fee cap under SB 7 applies, you cannot use an administrative fee to recover more than that from tenants.

If you would rather not track every utility billing bill working its way through Sacramento, that is what we do.

This is general information, not legal or tax advice. Confirm with a licensed professional before you act.

Sources

1. California Civil Code, Chapter 2.5, sections 1954.201-1954.205 (SB 7 codification): https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=CIV&division=3.&title=5.&part=4.&chapter=2.5.&op_statues=2016&op_chapter=623&op_section=2
2. SB 7 (2015-2016), chaptered bill text: https://www.leginfo.ca.gov/pub/15-16/bill/sen/sb_0001-0050/sb_7_bill_20160925_chaptered.html
3. AB 1248 (2025-2026), bill text and status history: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260AB1248
4. California Apartment Association, Bill to address rental housing fees put on hold for the year: https://caanet.org/bill-to-address-rental-housing-fees-put-on-hold-for-the-year/
5. California Apartment Association, California Water Submeter Requirements for Multi-Family properties: https://caanet.org/54832.kbdl

Last verified: July 2026.

Topics: compliance, RUBS, utility billing, SB 7, water billing

Back to the Schofield Properties blog

Schofield Properties is a family run property management company at 323 Richmond St, El Segundo, CA 90245. We have managed the South Bay since 1972 and personally oversee about 186 doors today. Book a call to talk about your property.