Q & A: Individual Meters In a Rental Building, The New York Times, Jay Romano

By Adam Leitman Bailey

November 13th, 2009

Q. Our landlord is installing individual electric meters in each apartment in our building, which has a mixture of regulated and nonregulated tenants. Each tenant will be paying for his or her own electricity, but at a lower-than- normal rate because of the large total consumption. Is this legal?

A. Adam Leitman Bailey, a Manhattan real estate lawyer, said the installation of individual meters in apartments was not only legal but also encouraged by most levels of government.

“Submetering is seen as a relatively easy way to reduce a building’s electric consumption,” he said.

The conversion is handled differently for regulated and free-market tenants.

Generally, he said, if a landlord installs buildingwide submetering, he can apply to the state’s Division of Housing and Community Renewal for the right to impose a major “capital improvement increase” on rents in regulated apartments. The landlord can also seek permission to exclude electricity from the regulated rent and to reduce the rent accordingly.

For free-market tenants, Mr. Bailey said, a landlord can shift from including electricity in the rent to excluding it upon the expiration of the current lease.