Nobody told you the rules changed.

That’s the most common thing we hear from MHP operators right now when the subject of utility billing compliance comes up. They’ve been billing residents the same way for years — maybe with a RUBS formula, maybe with a master-meter markup, maybe with a flat administrative fee layered on top — and they had no idea that in multiple states, that billing structure is now either illegal, legally contested, or on the regulatory chopping block.

In 2025 and 2026, the manufactured housing utility billing landscape shifted significantly. If you operate parks in any of these states — or plan to — this is not optional reading.

What Changed and Where

Minnesota (Effective January 1, 2025)

Minnesota enacted one of the most aggressive utility billing reforms in the country for residential landlords. The law now:

• Bans the apportionment of electricity costs among multiple units entirely (no more RUBS for electric)
• Requires strict, specific formulas for dividing natural gas and water/sewer costs
• Subjects submetered properties to Public Utilities Commission oversight, allowing tenants to file regulatory complaints
• Prohibits administrative markups on utility costs

If you operate in Minnesota and you haven’t updated your billing system and lease addendums to reflect these changes, you’ve been out of compliance since January 1, 2025. Every tenant bill you’ve sent since then is a potential complaint.

Colorado (Effective January 1, 2026)

Colorado’s Consumer Protection Act amendments are now in effect and include:

• Sweeping new pricing disclosure requirements for all utility charges
• Limitations on administrative fees and surcharges related to utility billing
• Mandatory disclosure of the methodology used to calculate each tenant’s bill
• RUBS is still permitted — but only under specific, documented conditions with full transparency

Other Active Hotspots

• Los Angeles: Active class action lawsuits against landlords using RUBS. Tenant attorneys are actively marketing to apartment and MHP residents.
• Arizona: The state AG sued MHP operators for fraudulent utility billing practices and dangerous electrical systems. The cases are ongoing.
• California: The Mobilehome Park Utility Conversion Program is in active evaluation, with financial pressure on master-metered parks to convert to direct utility service.

The Three Billing Structures Under Attack

1. RUBS (Ratio Utility Billing System)

RUBS allocates a community’s master utility bill among residents based on a formula — typically by unit count, occupancy, or square footage. The problem: it’s being challenged everywhere as “not based on actual usage” and therefore unfair. In Minnesota, electric RUBS is now banned outright. In other states, the formula must meet specific requirements and be disclosed in full.

The biggest liability trap: charging an administrative fee on top of the RUBS amount. This practice — common in older lease templates — is now specifically prohibited or capped in several jurisdictions.

2. Master-Metered with Markup

Some older parks receive a single utility bill and charge residents a per-home flat fee that’s higher than the pro-rated actual cost. This is illegal in most states and has always been — but enforcement is increasing significantly as tenant attorneys get organized.

3. Submetering Without Oversight

Submetering is generally the most defensible billing structure, but it’s not automatically safe. States like Minnesota now require landlords using submeters to register with the PUC and allow tenants to file complaints with state regulators. If your submeters are inaccurate, not properly maintained, or billing at a rate above the utility tariff, you have exposure.

What the Liability Actually Looks Like

Here’s what operators are discovering when they get sued over utility billing:

• Class action structure: One tenant files. An attorney sends a demand letter to all residents. Suddenly you have 80 co-plaintiffs claiming 3 years of overbilling plus treble damages under consumer protection statutes.
• Statutory damages: Many state consumer protection laws provide for statutory damages of $100–$1,000 per violation regardless of actual harm. In a 100-lot park, that’s $10,000–$100,000 before the attorney even argues actual damages.
• Lease invalidity: If your utility billing addendum violates state law, courts have found the entire billing provision unenforceable — meaning tenants can seek refunds for the full period of billing.

The good news: most of this is completely avoidable with a proactive compliance review.

The 4-Step Compliance Audit

Here’s what we recommend for every MHP operator — do this for every park, in every state:

Step 1: Identify your current billing structure. Pull your current lease utility addendum. Specifically identify: what method you use, what fees you charge beyond actual utility cost, and what disclosure language you provide to tenants.

Step 2: Map your states against current law. Research the current utility billing requirements for each state where you operate. Pay particular attention to states that cap or prohibit RUBS, require master bill disclosure on tenant request, prohibit administrative fees, or have new laws effective in 2025-2026.

Step 3: Send your addendum to an MHP attorney. This is a $300–$500 investment that could save you tens of thousands. Ask specifically: is this compliant with current state law, what needs to change, and should we be concerned about liability for past billing under the old structure.

Step 4: Transition to submetering on your long-term roadmap. RUBS is increasingly untenable. The national trend is clear: states are either banning it, restricting it, or adding so many disclosure requirements that it becomes administratively burdensome. Plan for individual submetering in your capital budget.

Don’t Wait for a Complaint

The operators who are getting hurt right now are the ones who knew, somewhere in the back of their minds, that their billing setup was “probably fine” — until it wasn’t.

This isn’t theoretical risk. In 2025 alone, we saw class action filings in California and a state AG action in Arizona, both targeting manufactured housing utility billing. The playbook is written. Tenant attorneys know how to do this.

A compliance audit is a one-time exercise. A class action lawsuit is a multi-year, multi-six-figure distraction from everything else you’re trying to build.

Review your billing setup now.

For a complete due diligence system used on 50+ acquisitions, check out the MHP Due Diligence Playbook at keelteam.com/mhp-due-diligence-playbook.

Keel Team operates manufactured housing communities across the Southeast and Midwest. We publish these operational insights because better-informed operators make the entire industry stronger.