If you’re still billing residents using a Ratio Utility Billing System — splitting water, sewer, or electric costs proportionally without individual meters — you may be sitting on a six-figure liability and not know it.

In October 2025, a California property management company settled a RUBS-related lawsuit for $495,000. In early 2026, an Ohio Supreme Court ruling reclassified submetering companies in manufactured housing communities as public utilities subject to state rate oversight. Connecticut banned RUBS outright. Minnesota banned it for electricity. Arizona’s Attorney General is actively securing refunds for residents.

The legal tide is turning — fast. And it’s not just coastal states anymore.

What RUBS Is (And Why Operators Have Been Using It)

RUBS — Ratio Utility Billing — is how most older mobile home parks handle utility recovery. Instead of installing individual meters for each space, the park receives one master water or electric bill, then splits that cost among residents using a formula based on occupancy, square footage, or lot size.

It made sense in the 1980s and 90s. Submetering was expensive. Infrastructure was hard to retrofit. RUBS was a practical workaround.

But there are three serious problems with RUBS in 2026:

1. Residents can’t control their bill. If there’s a leak on the other side of the park, everyone’s bill goes up. Tenants have no ability to conserve their way to a lower payment.
2. It’s increasingly being used to disguise rent increases. Regulators noticed. When lot rent is capped by law but utility RUBS charges are not, some operators have been quietly raising total resident cost through the utility line. Courts are now calling this what it is.
3. State law is rapidly evolving. What was legal in your state in 2022 may not be legal today. And the list of restricted states is growing quarterly.

The States to Watch Right Now

• Connecticut: RUBS banned for residential properties (Supreme Court, 2024)
• Minnesota: RUBS banned for electricity; restricted for water and gas (January 2025)
• Arizona: AG consumer protection enforcement active; resident refunds secured (mid-2025)
• California: Active litigation; LA considering banning RUBS in rent-controlled areas
• Washington: New billing requirements tied to rent control framework (May 2025)
• Ohio: Submetering companies now treated as regulated utilities (April 2026)

North Carolina, Tennessee, Georgia, South Carolina — the Southeast remains largely permissive for now. But “for now” is doing a lot of work in that sentence. Once enough states move, federal guidance often follows.

What Operators Should Do Right Now

Step 1: Get a legal opinion on your current exposure.

This is a $500–1,500 call with an attorney who knows landlord-tenant law in your state. Worth every dollar. Ask specifically: (a) Has your state restricted RUBS in any way? (b) Could your current billing structure be characterized as an undisclosed rent increase? (c) What’s the retroactive exposure window?

Step 2: Conduct a billing audit.

Pull your last 24 months of utility billing data. Are residents’ RUBS charges increasing faster than your actual master utility bill? That spread will be the first thing a plaintiff’s attorney looks at.

Step 3: Get serious about submetering.

Modern wireless submeter systems have come a long way. Non-invasive clamp-on meters can be installed without digging up infrastructure. Total cost runs $150–$500 per space depending on your park’s age and pipe configuration. At 100 spaces, you’re looking at $15,000–$50,000 — which sounds like a lot until you model the NOI lift.

Here’s the math that usually changes minds: Once residents are individually metered, average water consumption drops 15–40%. Pair that with full cost recovery, and a 100-space park commonly sees $7,500–$12,000/year in utility savings. At a 7% cap rate, that’s $107,000–$171,000 in added property value. The submeters pay for themselves in 18–24 months.

Step 4: Plan the resident communication.

The biggest mistake operators make is switching residents to submetering without a communication strategy. Residents who feel blindsided complain to regulators. Residents who feel informed accept the change. Send a letter 90 days out. Explain why you’re switching. Show them how the new system benefits them — they pay for what they use, not their neighbor’s habits. Offer a FAQ. Have your property manager ready to take calls.

The Bottom Line

RUBS isn’t inherently predatory. But the regulatory environment has shifted, and operators who haven’t updated their approach are carrying legal risk they don’t realize. The parks that transition to submetering now — before they’re forced to — come out ahead: better NOI, better compliance posture, and better resident relationships.

Don’t wait for the lawsuit. Get ahead of it.

For a comprehensive mobile home park due diligence framework — including utility billing audits, infrastructure checks, and compliance checklists — see the Keel Team Mobile Home Park Due Diligence Playbook.

Andrew Keel is the founder of Keel Team Real Estate Investments, which owns and operates 50+ mobile home parks across the United States. For questions about utility billing compliance or submeter transition strategies, visit keelteam.com.