If you own mobile home parks and you’re billing residents for utilities using RUBS — or if you’re earning any administrative markup on utility pass-throughs — you need to read this carefully.

Because what was standard operating practice two years ago is becoming illegal. Fast.

And if you’re underwriting a new acquisition based on current utility billing income, you may be buying a problem that doesn’t show up until year two.

Here’s what’s happening, what’s at risk, and what to do about it.

The State-by-State Crackdown Is Real

Let’s be direct about what’s happening legislatively:

Minnesota (effective January 1, 2025): Completely banned RUBS for electricity. You cannot apportion an electric master bill among residents using a formula. Administrative markups on any utility: also banned.

Colorado (effective January 1, 2026): New Consumer Protection Act amendments require sweeping disclosures on utility billing and cap what you can charge in administrative fees.

Arizona: The state Attorney General in August 2025 sent formal notices to all mobile home park operators reminding them of their utility submetering and billing obligations. That’s not a suggestion — that’s enforcement posture.

California: The Mobilehome Residency Law continues to evolve with new provisions around rent and utility increases during emergencies (SB 610, amended 2025).

New Jersey: The Senate passed the Manufactured Home Park Protection Act in December 2025, adding resident rights around utility billing disputes.

That’s five states in the last 18 months. This is not a localized trend. This is a national regulatory wave that’s building.

What Is RUBS and Why Does It Matter?

RUBS — Ratio Utility Billing System — is a method of allocating a master utility bill among residents. Instead of each resident having their own meter, the park buys utilities in bulk and then charges residents their “share” based on a formula: maybe square footage, maybe number of residents per unit, maybe just straight division by lot count.

For years, RUBS was a legitimate and common tool. It allowed operators in parks without individual meters to recover utility costs without installing expensive submetering equipment. Many acquisition underwriting models assume RUBS income as part of the NOI.

Here’s why states are targeting it: RUBS doesn’t bill residents for what they actually use. If your park has a major water main leak for three months, every resident pays a share of that wasted water. Legislators view this as unfair to residents who have no ability to control or dispute their share of a bill they can’t verify. They’re not wrong. And they’re winning.

The Risk to Your Underwriting

If you bought a park in 2023 or 2024 — or if you’re underwriting one today — and your model includes RUBS income as a revenue line, administrative markups on utility pass-throughs, or utility income that is currently unmetered, you need to stress-test that income against the scenario where your state bans it in 18–24 months.

The math hurts. If you have 100 lots and you’re clearing $40/lot/month in net utility income (after master meter cost), that’s $4,000/month — $48,000/year — in NOI that could disappear. At a 6.5% cap rate, that’s $738,000 in value that evaporates with a single piece of state legislation.

This is not hypothetical. It’s happening to operators right now in Minnesota and Colorado.

Submetering: The Solution That Works (But Costs Money)

The compliant solution to all of this is individual submetering — installing a separate meter for each lot so residents are billed for actual usage. This is what states want. This is what survives regulatory scrutiny. This is what eliminates resident disputes.

The cost: $800–$2,500 per lot depending on your infrastructure. For a 100-lot park, that’s $80,000–$250,000 in capital expense. That’s real money. But here’s how to think about it:

1. It’s a capital expense, not an operating expense — meaning it may be depreciable and could improve your park’s marketability and appraisal value
2. It protects a revenue stream — if you’re billing back utilities, submetering secures that income legally
3. It eliminates disputes — residents who can see their own usage have fewer complaints. Lower dispute rate = lower management burden = lower turnover
4. It future-proofs your park — buyers and lenders are increasingly scrutinizing submetered vs. master-metered parks differently

If you’re buying a park in a state with active legislative pressure on RUBS, budget submetering costs into your acquisition model before you close. Not after.

How to Know If Your State Is at Risk

Here’s a quick triage:

High risk right now: Minnesota, Colorado, Arizona, California, Oregon, New Jersey

Moderate risk: Washington, Maryland, Maine, Connecticut

Lower risk (for now): Most of the Southeast — NC, TN, GA, SC — but the trend is moving south. “Lower risk” does not mean “no risk.”

The Lease Audit You Should Do This Month

Pull your leases. Pull your utility billing addenda. Run them by a local mobile home park attorney in each state where you have parks. Ask three specific questions:

1. Is our current utility billing method (RUBS, flat fee, markup) legal in this state today?
2. What legislation is pending that could change this?
3. What does our lease language need to say to be compliant and defensible?

This is a 2–3 hour engagement per state. Costs $300–$600 per attorney review. It’s cheap insurance against an enforcement action that could cost you far more. For a deeper look at what belongs in your lease and your due diligence checklist, our Mobile Home Park Due Diligence Playbook covers utility billing compliance as part of a full pre-close review framework.

What Keel Team Is Doing

We operate across the Carolinas, Tennessee, and Georgia. Here’s our current posture:

• All new acquisitions: we underwrite assuming submetering will be required within 3–5 years in any park currently on RUBS, and we budget accordingly
• Existing parks: annual lease audit against current state law
• We do not use administrative markups on utilities — it’s a complaint magnet and a regulatory target
• We track legislative activity in all four of our target states quarterly

The goal isn’t just compliance. The goal is operating parks that are durable — parks that won’t get a regulatory land mine dropped on them because the operator was playing games with utility billing.

Bottom Line

The utility billing landscape is shifting fast. What was standard practice in 2021 is becoming legally prohibited in 2025–2026. If your cash flow model depends on utility billing income that isn’t backed by actual submetering, you have exposure.

The fix isn’t complicated. Audit your leases. Know your state laws. Budget for submetering in new deals. And don’t buy parks in high-risk states without accounting for this risk in your underwriting.

The operators who get ahead of this now will be the ones who aren’t scrambling to explain a compliance violation to their LPs in 2027.

Andrew Keel is the founder of Keel Team, a mobile home park investment firm specializing in direct-to-owner acquisitions across the Southeast. Keel Team operates 50+ communities across multiple states.