Conundrum: How To Bill When Submetering (Profits And Losses Depend On The Answer)

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How should leasing parties measure and allocate the costs of electricity or other meterable utility services? To answer that, let’s settle on some common terminology. You can measure demand and consumption by one of these three methods: (a) master metering (when one meter for the entire building is used to “bill” the tenants); (b) direct metering (when each tenant, and the common areas, get its own meter and deals directly with the utility provider; and (c) submetering (when there is a master meter and each tenant also has a submeter for its own space – one that “fits between” the master meter and the leased premises). [Read more…]

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