Why RUBS Water Billing Is Fading in California (SB 7, Civil Code Section 1954.201)

Published August 10, 2026

SB 7 did not ban ratio utility billing. It mandates submeters in new multifamily construction and tightly caps what a landlord can charge to bill submetered water, which is why RUBS keeps shrinking to older buildings even though the statute stays neutral on it by name.

The short answer

California law does not ban ratio utility billing (RUBS) outright. SB 7, codified starting at Civil Code section 1954.201, explicitly states it creates no policy favoring or disfavoring RUBS, and Civil Code section 1954.216 limits the whole chapter to buildings that already use submeters. What actually squeezes RUBS out is a separate piece of the same bill, Health and Safety Code section 17922.14, which requires water submeters in newly built multifamily housing. New buildings cannot legally use RUBS because they are required to submeter. Existing, non-submetered buildings remain free to use RUBS under state law.

Last verified: August 10, 2026

Correcting the common claim

A lot of property management content states flatly that California banned RUBS. That is not what the statute says. Civil Code section 1954.216, subdivision (c), states plainly: "Nothing in this chapter shall be construed to apply or create a public policy or requirement that favors or disfavors the use of a ratio utility billing system." That sentence is doing real work. The legislature had the chance to prohibit RUBS statewide and chose not to.

What SB 7 actually built is a regulatory chapter, Civil Code sections 1954.201 through roughly 1954.219, that governs submetered water billing specifically: how landlords and billing agents can bill tenants for water once a submeter is installed, what fees they can charge for that service, and what disclosures and dispute rights tenants get. RUBS, which allocates a master-metered building's total water bill to tenants based on square footage, occupancy, or a similar formula rather than actual submetered usage, sits outside that chapter entirely. Section 1954.202 defines RUBS by name only to make clear the chapter's billing rules do not apply to it.

Where the real pressure on RUBS comes from

The mechanism that is actually retiring RUBS is new construction policy, not a RUBS-specific ban. Health and Safety Code section 17922.14, added by the same SB 7 legislation, directs the state to adopt building standards requiring water meters or submeters in newly constructed multiunit residential and mixed-use structures. That requirement took effect January 1, 2017, for buildings within its scope, with a short list of exemptions (long-term health care facilities, certain low-income housing, senior residential care facilities, student housing, and time-share properties).

The practical effect is straightforward. A newly built apartment building in the South Bay is required to have submeters, which means the property cannot lawfully use RUBS for those units at all, since there is nothing to ratio when actual usage is being measured. RUBS survives only in the shrinking population of older, master-metered buildings that were never required to retrofit submeters. As those buildings get renovated, refinanced, or sold and upgraded, more of them install submeters voluntarily, both for the water-conservation case the legislature made in section 1954.201 and because submetered billing lets an owner pass through actual usage rather than an estimate tenants can dispute.

What actually changes once a building submeters

Once a property has submeters and bills tenants for water under Civil Code chapter 2.5, section 1954.205 puts a specific, adjustable cap on the administrative fee a landlord or billing agent can charge for that service.

| Item | Current statutory rule |

|---|---|

| Administrative fee cap | The lesser of 4.75 dollars (as adjusted) or 25 percent of the amount billed |

| CPI adjustment | Landlord may raise the 4.75 dollar cap each calendar year, starting January 1, 2018, by no more than the increase in the California fiscal year average Consumer Price Index for all urban consumers, as determined by the Department of Finance |

| Scope | Applies only to dwelling units with a submeter, either because submeters were legally required or because the landlord chose to submeter |

| RUBS | Not regulated by this chapter; chapter is neutral on RUBS by statute |

Confirm the current-year CPI-adjusted dollar figure directly with the California Department of Finance's published CPI data before setting a fee, since the cap moves annually and this article is not a substitute for that year's published adjustment.

What this means for a South Bay owner

If you own an older master-metered building in El Segundo, Manhattan Beach, Hermosa Beach, Redondo Beach, Torrance, Hawthorne, Inglewood, Gardena, or Carson, state law does not force you off RUBS. The pressure is practical rather than statutory: tenants increasingly expect to pay for what they actually use, submetering is now the default for anything built or substantially renovated recently, and a RUBS allocation formula based on square footage or occupancy is more vulnerable to a tenant dispute than a submeter reading, simply because there is no meter to point to.

If you are building new or doing a significant multifamily renovation in the South Bay, plan for submeters from the start. Section 17922.14 makes that close to mandatory for new construction within its scope, and retrofitting later is more expensive than designing it in.

If you already use RUBS on an older building and have no near-term plan to submeter, the legal exposure under this specific statute is limited, since the chapter does not reach you. Your bigger practical risks are the ordinary ones: making sure your RUBS allocation method is disclosed clearly in the lease, and checking whether your specific city has added any local water-billing disclosure rule on top of state law.

FAQ

Is RUBS illegal in California?

No. State law, specifically Civil Code section 1954.216, states the chapter creates no policy favoring or disfavoring RUBS. RUBS remains legal in buildings that are not required to submeter.

Can a newly built apartment building in the South Bay use RUBS instead of submeters?

Generally no, if the building falls within the scope of Health and Safety Code section 17922.14's submetering requirement for new multiunit construction. Confirm applicability and any exemption for your specific project with your local building department.

What can a landlord charge as an administrative fee for submetered water billing?

Under Civil Code section 1954.205, the fee is capped at the lesser of 4.75 dollars, as adjusted annually for CPI starting in 2018, or 25 percent of the amount billed. Confirm the current adjusted dollar figure for the current year before setting a fee.

If I install submeters voluntarily in an older building, does the fee cap apply to me?

Yes. Civil Code section 1954.216 applies the chapter's billing rules to any dwelling unit where submeters are used to charge a tenant separately for water service, whether the submeters were required or installed voluntarily.

Does this state law override a city's local water billing rules?

This article addresses state law only. Some South Bay cities regulate utility billing disclosures or rent stabilization interactions separately. Confirm with your specific city's housing or rent stabilization office whether any local rule adds requirements on top of the state chapter described here.

This article is general information about a California statute, not legal advice. Water billing rules interact with lease terms, local ordinances, and CPI figures that change annually. Confirm current requirements with a California landlord-tenant attorney before changing how you bill for water.

Topics: compliance, water billing, RUBS, submetering, South Bay, SB 7

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