Changing an existing RUBS upon property acquisition
I am taking over a property which currently only reimbursed for \~30% of the entire property's utility expenses.  When I take the property over, one of my first fixes is having tenant's pay for a much greater portion of the property's utilities.  Does anyone have some insight on the best way/process of making this correction to the current RUBS.  Any advice would be greatly appreciated.  

When you look at the financials... the current owner was basically paying for the vast majority of a decent sized apartment complex.  That is not good business
[{"id": "if8nsx5", "text": "Is the RUBS language included in all the leases? There might be a reason they are only getting 30%...", "replies": [{"id": "if8s8qo", "text": "The complex is master metered (built in 69) so I am going to assume that RUBS would be the only way the Landlord could not have to pay the utilities for the entire complex.  But to directly answer your question, I have not done my lease check yet so right now I am just under the assumption that RUBS language exists in all leases.", "replies": [{"id": "ifcgojl", "text": "Who gives a fuck when it was built. READ THE FUCKING LEASES", "replies": [], "depth": 3}, {"id": "ifch3c0", "text": "I\u2019m actually livid. If a jr walked into my office with questions like this, then told me he hadn\u2019t read the leases I\u2019d make him come in on a Saturday and write an essay on why it\u2019s important to read leases and not ask stupid fucking questions", "replies": [{"id": "ihebkke", "text": "I had not gotten to the Due Diligence Period yet ass-hat. Of course, of course read the leases and 100 other DD items....  I was looking if someone knew something that may surprise me when I dove into the leases.  I am not sure why anything on the internet would make you \"actually livid\" but I can tell you without a doubt you are on a next level of douchebag and \\[if\\] anyone works for/under your supervision: They probably are looking for their next role or someone else to work under.\n\n&amp;#x200B;\n\nEither way, you should add to the sub not read through it in order to troll and try and posture like you are someone of importance.  You had no idea where I was in the deal process.  Good luck.", "replies": [{"id": "iheqe4w", "text": "Sounds like you didn\u2019t know where you were in the deal process either ;) do you know yet?", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "if8qcu5", "text": "You can hire a firm like Conservice to do a utility assessment analysis and see what you could expect to get back in RUBS.\n\nIn terms of implementation, you will have to review the leases and make sure you are allowed  charge back. If not, you\u2019ll have to do that on lease trade outs.", "replies": [{"id": "if8rdmg", "text": "Is is necessary to have a 3rd party conduct these assessments or can I just increase it myself to what the county allows for?   The reason I say this is because there is already a bill back system in place ( I am not sure the reason why the rate it is so low) so I am going to assume that current in-place leases afford the landlord the ability to do so.", "replies": [{"id": "if8yb4c", "text": "No you don\u2019t need a third party.\n\nI wouldn\u2019t just assume the leases allow for it. You need to do a lease file audit (go through 100% of the leases) to see what is specifically allowed.", "replies": [{"id": "if975rk", "text": "Let's hypothetically say 100% of the leases contain language allowing me to use the RUBS to charge back utility costs back to the tenant.  Also,  in this hypothetical scenario the property is mismanaged and for whatever reason the bill back rate is super low. \n\nHow do I go about correcting this upon acquisition?  Is it as simple as sending a letter out to tenants explaining new management is adjusting the rates and they will be reflected on monthly invoices starting in .... 2 months time or something along those lines.\n\nI may just be overthinking this, but for this particular MF complex, it will be necessary to fix this as soon as possible.", "replies": [{"id": "if9bo8w", "text": "Hypothetically that should be easy to fix. However why is the current owner ignoring that free money? There is almost certainly a reason. If you make an offer without reviewing the leases (you shouldn\u2019t) you might include language in the offer to cover possibilities you haven\u2019t considered.", "replies": [{"id": "if9pg8y", "text": "That is my exact thought... It is almost a dealbreaker for me as it makes a huge difference to my NOI.  There is definitely \"some\" utilities bill back on their financials so its either only a portion are on this or something to do with mismanagement", "replies": [{"id": "ifa703i", "text": "Just make sure your review of the leases is part of your inspection/feasibility contingency", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "if98tus", "text": "I think your best bet is checking the lease language. I\u2019m sure you\u2019ll have to implement a lease addendum to existing ones. If there\u2019s no language, then if the tenant declines you can\u2019t do anything about it until renewal. This may be a longer process than just everyone switches over in two months, but again, depends on the current lease.", "replies": [], "depth": 1}, {"id": "if9cg7j", "text": "Check comparable properties in your area and see how their rubs are, if everyone else charges 20% you\u2019ll have a hard time finding tenant who will pay more than 30%", "replies": [], "depth": 1}, {"id": "ifayubm", "text": "Once you understand the RUBS language in your leases you'll have a better sense of how to change the percentage. In my case I had to change my lease template and slowly switch over at renewal time. So you end up with an old rate and a new rate and have to track who gets what bill amount until all leases have switched over 12 months later.", "replies": [], "depth": 1}, {"id": "ifcgl47", "text": "This sub is retarded. 90% of the time the solution is \u201cread the fucking lease\u201d", "replies": [], "depth": 1}]