Understanding Water Submetering Laws in Canada and the United States: What Every Property Owner Should Know

For property owners, developers, and landlords in Canada and the United States, water submetering has become an increasingly valuable tool for managing utility costs and promoting conservation. However, implementing a submetering system isn’t just a matter of installing new hardware. It requires a clear understanding of water submetering laws, which vary significantly across both countries. Without this legal awareness, property owners risk violating tenant utility rights, facing compliance penalties, or triggering billing disputes.
Before introducing a submetering system in any residential, commercial, or mixed-use building, it’s critical to understand the legal frameworks that apply in your region. These laws shape what is allowed, how tenants must be informed, and how billing should be structured. Getting it right from the start can protect your investment, preserve your relationships with tenants, and support long-term operational success.

The appeal of water submetering is clear. Instead of relying on a single master meter and dividing water costs evenly across tenants, each unit gets a dedicated meter. This enables precise tracking of individual water use and allows tenants to be billed fairly based on their actual consumption. But when water becomes a separately billed utility, it enters a legally sensitive territory.
Across Canada and the US, submetering regulations are meant to prevent unfair billing, surprise charges, and unauthorized changes to utility responsibilities. They ensure that tenants are properly informed, that landlords operate transparently, and that submetering systems meet technical and billing standards. These laws are not uniform, and often they are influenced by local housing rules, consumer protection laws, and public utility policies.
Ignoring or misinterpreting these rules can lead to costly mistakes. That’s why it’s essential for property owners to understand what is legally permissible in their specific province, state, or city before proceeding.

In the United States, submetering laws are largely governed at the state level, with some municipalities adding extra requirements. While submetering is generally allowed in both residential and commercial buildings, the rules surrounding it differ considerably from one region to another.
Some states, such as California and Texas, have detailed submetering laws that spell out the obligations of landlords when it comes to tenant water billing. For instance, California’s water submetering regulations require that all new multifamily constructions (built after 2018) include submeters for each residential unit. These laws also mandate clear billing statements, access to usage data, and restrictions on administrative fees.
In Texas, landlords must register their submetered systems with the Texas Commission on Environmental Quality. They are also required to follow strict billing practices that include detailed monthly invoices, meter accuracy standards, and disclosures about service charges. Importantly, landlords in Texas cannot profit from water reselling—they are allowed only to recover actual costs.
Other states, such as New York or Illinois, allow submetering but require a formal application process, tenant disclosure, or consent for implementation. Some rent-controlled cities or counties place additional limitations on utility billing practices, especially in older buildings.
It’s also worth noting that in several jurisdictions, master-metered buildings that wish to switch to submetering must comply with plumbing codes and utility commission approvals. This creates a complex legal environment where property owners must do more than just install equipment—they must follow a defined compliance roadmap.

In Canada, water submetering is becoming more common, especially in Ontario and British Columbia. However, Canadian laws tend to emphasize tenant rights more explicitly, especially when it comes to existing rental properties.

In Ontario, landlords may only charge tenants directly for water use if the building is equipped with proper submeters. For residential units that were occupied before January 1, 2011, tenant consent is legally required before submetering can be introduced. For newer buildings, landlords can include water billing as part of the lease agreement from the outset, avoiding the consent issue entirely.

The Ontario Energy Board provides detailed guidance on how submetering companies must operate, including transparency in billing, equipment accuracy, and dispute resolution mechanisms. Landlords are strongly advised to work with licensed submetering providers who understand these provincial requirements.

In British Columbia, submetering is permitted, but only under specific conditions. A landlord must clearly outline water billing arrangements in the lease, and any changes during an active tenancy require mutual agreement. If a landlord begins billing for water without proper lease terms or consent, tenants can challenge the charges through the Residential Tenancy Branch.

Other provinces, such as Alberta and Quebec, do not prohibit submetering outright but may treat it differently depending on whether the building is residential, mixed-use, or commercial. In all cases, consumer protection laws still apply, meaning that billing must be fair, accurate, and supported by clear records.

Whether in Canada or the US, one of the central principles of landlord water billing laws is transparency. Tenants have the right to understand what they are being charged for, how the charges are calculated, and what recourse they have in case of disputes.
A fair and legal submetering program should always include written notice to tenants before implementation. The notice should explain how the system works, what to expect in monthly billing, how meter readings are taken, and whether any service fees will be added. It’s also best practice to give tenants access to their usage data, so they can track and verify their consumption.
Inaccurate or estimated billing is one of the fastest ways to create conflict. In many jurisdictions, landlords who cannot provide precise meter readings or who apply unfair markups may face regulatory action or tenant litigation. That’s why using certified meters and licensed billing providers is not just good business—it’s a legal safeguard.

One of the most common challenges for property owners in both Canada and the US is retrofitting older buildings with submetering infrastructure. While newer constructions are often designed with utility metering in mind, older buildings may require plumbing upgrades, permit approvals, and compliance with local building codes before submeters can be installed.
In some areas, property owners must work with municipal utility providers to ensure that changes to the internal plumbing or meter systems do not violate existing water service agreements. Failure to follow this process could result in fines or delays in service restoration.
For residential landlords, it’s also important to recognize that tenants in older buildings may be more sensitive to changes in how utilities are billed. Legal risk increases when new charges are introduced mid-tenancy without consent or proper explanation. This is especially true in rent-regulated markets where utility costs are considered part of the legal rent.

Water submetering can offer incredible long-term benefits: better cost control, reduced water waste, and fairer billing for tenants. But none of these benefits matter if the legal framework is ignored. A well-meaning landlord can find themselves in court or before a regulatory board simply for failing to provide proper notice, documentation, or consent.
Compliance protects not just the landlord, but the tenant relationship and the property’s long-term performance. The smartest approach is to partner with a professional submetering company that understands your province’s or state’s legal requirements. This ensures that your system is built on a strong legal foundation and that you remain compliant throughout the life of the property.
If you’re considering installing water submeters in a multifamily building, commercial complex, or mixed-use property in Canada or the US, take the time to understand your region’s specific regulations. Seek expert advice, consult legal counsel if necessary, and document every step of your implementation process. Doing so won’t just help you stay within the law—it will help you run a more transparent, efficient, and trusted operation.