Utility billing laws for landlords in Texas
Rules reviewed September 2026
This is information, not legal advice.
SplitDue performs the math; you are responsible for following your state and local rules on utility billing to tenants. Most states require the allocation method to be disclosed in the lease, prohibit billing tenants more than the actual utility cost, and some cap or prohibit admin fees. This is not legal advice. Rules were reviewed September 2026 (version 2026-09) and are not exhaustive — cities frequently add their own requirements. Confirm current law with a Texas attorney before you bill.
At a glance
- Admin fee
- Not allowed on allocated bills
- Lease disclosure
- Required. State the utilities billed and the allocation method before the tenant signs.
- Billing above the utility's bill
- Not permitted. Tenant shares must never total more than the master bill.
- Common areas
- Excluded. Hallways, laundry and irrigation stay the owner's cost.
What Texas requires
- Allocated water/wastewater billing requires registration with the PUC and specific lease disclosures (16 TAC 24.277 to 24.283).
- Approved methods are limited (occupancy, ratio occupancy, bedroom scale, or a combination with square footage capped at 50%). A common-area deduction of at least 5% (25% with unmetered irrigation) is required.
- No service charge may be added to allocated water bills; late fees are limited to 5%.
How SplitDue handles this
- Because Texas restricts admin fees on allocated bills, SplitDue shows that warning when you set one and records the rule alongside the utility.
- Tenant shares are calculated so they add up to the master bill exactly, never more, and rounding remainders are absorbed rather than collected twice.
- Vacant and owner-occupied units still take their share of every bill, but that share is assigned to you rather than pushed onto the remaining tenants.
- Each tenant bill states the method, the service dates, the inputs used, and the utility's total, which is the disclosure most states expect you to be able to produce.
Related reading
- What Is RUBS Utility Billing?RUBS splits one master utility bill across units by formula instead of by meter. How the allocation methods work, how it compares to submetering, and the rules that apply almost everywhere.
- How to Split a Water Bill Between TenantsFour defensible ways to divide one water bill across units, a worked example that adds up exactly, how to handle submetered and vacant units, and the state rules to check first.
- Utility Billing Admin Fees: Capped, Banned, or AllowedWhich states prohibit admin fees on allocated utility bills, which cap them, and the three mistakes that turn a reasonable fee into a violation.
- Lease Language for Utility AllocationWhat a utility disclosure clause has to establish, sample language to take to your attorney, and the four clauses that cause disputes.
Other states
Split your Texas bills correctly
SplitDue does the allocation, produces a documented PDF for each tenant, and tracks which periods you have already billed.