Draft:Ratio Utility Billing System

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{{AFC comment|1=Sources are either primary (like government sites) which should be used very sparingly and/or not reliable (commercial sites offering products and services). I suggest looking for scholarly papers such as studies by academics about the impacts of RUBS. (Side note: it is covered in the Utility submeter article]]). S0091 (talk) 16:58, 4 May 2025 (UTC)}}

{{AFC comment|1=I'm not sure if you're stating your own criticisms or not in the relevant section because there are no sources. Please note we really don't need "editor's opinion" stuff in articles. ABG (Talk/Report any mistakes here) 00:47, 4 February 2025 (UTC)}}

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The Ratio Utility Billing System (RUBS) describes any method used to determine the amount of a fee which is labeled to represent a landlord's business expense (typically but not necessarily a utility expense) and is charged to a tenant by a landlord, but not based on actual consumption of the utility or expense-incurring resource by the tenant.{{cite web |title=Utility Allowances Submetering |work=1. Actual-Consumption Submetering Arrangements and Ratio Utility Billing Systems |date=2016-03-03 |url=https://www.federalregister.gov/d/2016-04606/p-11 |access-date=2025-02-02}} {{cite web |title=Top 10 Reasons to Implement a Ratio Utility Billing System (RUBS) |work=What is Ratio Utility Billing System |date=2023-10-12 |url=https://bfpminc.com/10-top-reasons-to-implement-a-ratio-utility-billing-system-rubs/#:~:text=What%20is%20Ratio%20Utility%20Billing%20System |access-date=2025-02-01}} {{cite web |url=https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=grp§ion=8-212.4#:~:text=any%20method%20that%20does%20not%20measure |title=Maryland Statutes Text Real Property |work=Section 8-212.4.a.5 |date=2022 |access-date=2025-02-02}}

Typical landlord expenses in this system include but are not limited to water, sewer, electric utilities or internet service. There is no requirement that the total fee revenue be less than or equal to the landlord expense to which it is related and there is no set method to calculate the fee.{{cite web |title=RUBS Billing |work=Custom RUBS Formulas |date=2025 |url=https://www.synergyutilitybilling.com/services/rubs-billing/#:~:text=CUSTOM%20RUBS%20FORMULAS |access-date=2025-02-03}}. However, state and local ordinances may impact the fee calculation.{{cite web |title=Montgomery County Department of Housing And Community Affairs |work=Multi-family Apartment Complex Ratio Utility Billing System |date=2019 |url=https://www.montgomerycountymd.gov/DHCA/Resources/Files/finance/licensing/forms/rubs-form.pdf |access-date=2025-02-02 }} RUBS is not legal in all US states.{{cite web |url=https://www.ncuc.gov/ncrules/Chapter18.pdf |title=PROVISION OF WATER AND SEWER SERVICE BY LESSORS |work=Rule 18-6. Rates. Paragraph a (p.8) |date=2018-04-04 |access-date=2025-02-02}}

The fee may have various names, but is often referred to as a utility fee. It is an additional fee paid to the landlord on top of the stated rent in the lease.{{cite web |url=https://bfpminc.com/10-top-reasons-to-implement-a-ratio-utility-billing-system-rubs/#:~:text=Shift%20from%20Net%20Operating%20Expense%20to%20Net%20Operating%20Income |title=Top 10 Reasons to Implement a Ratio Utility Billing System (RUBS) |work=Shift from Net Operating Expense to Net Operating Revenue |date=2023-10-12 |access-date=2025-02-02}} The IRS requires RUBS payments to be included in gross rent. Landlords often use a 3rd party collector for this fee.

The contract structure created by the Ratio Utility Billing System is a lump sum (rent) plus expenses (RUBS fees), also known as a cost plus contract.{{cite web |url=https://www.abc.org/Portals/1/Documents/Membership%20Docs/MemberDiscountDocs/ContractTypes.pdf |title=Construction Contract Types |work=Construction Contract Types |date=2025 |access-date=2025-05-26}} {{cite web |url=https://www.acquisition.gov/far/subpart-16.3 |title=Cost plus contracts |work=Cost plus fixed fee contract FAR Section 16.306 |date=2024 |access-date=2025-02-01}}

Such a contract may contain a Guaranteed Maximum Price (GMP) {{cite web |url=https://www.netsuite.com/portal/resource/articles/accounting/guaranteed-maximum-price-contract.shtml#:~:text=not-to-exceed%20price |title=How Do Guaranteed Maximum Price (GMP) Contracts Work |work=Guaranteed Maximum Price (GMP) Contracts Explained |date=2022-09-05 |access-date=2025-02-02 |last1=Com |first1=Netsuite }} {{cite web |url= https://www.acq.osd.mil/dpap/policy/policyvault/USA001270-16-DPAP.pdf#:~:text=shall%20not%20exceed |title=Guidance On Using Incentive And Other Contract Types |work=Cost Plus Fixed Fee Contracts (p.12) |date=2016 |access-date=2025-02-02}} but in RUBS, they typically do not.

Draft:Ratio Utility Billing System

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