Mobile Home Park Guides

Mobile Home Park Utility Billing: The Three Models

Parks recover utility costs one of three ways — bundling the cost into lot rent, allocating it across lots by formula, or submetering each lot and billing actual usage — and which of these is even permitted depends on state rules and on how the park is metered in the first place. The choice matters more in a park than in most rentals, because water and sewer are frequently the largest cost line an operator can actually influence.

This guide explains what each model asks of you, what submetering really involves, how the decision gets written into the lease, and where our own software stops.

Why Utilities Are the Defining Cost Question in a Park

A master-metered park receives one bill for the entire community. The utility meters what crosses the property line and sends a single invoice; what happens to that water once it enters the park's own distribution lines is invisible. There is no per-lot figure and no way to tell which home changed its behavior. The operator sees a total that moved and has to work backwards from nothing.

That invisibility is where the money goes. A toilet running continuously under an occupied home draws water every hour of every day and produces no complaint from anyone, because it costs the household nothing. A cracked service line between the main and a lot does the same thing underground, and in a park with older lines it can run for months. Both show up only as a master bill larger than last year's, which is easy to attribute to a rate increase and move on from.

The asymmetry is the whole argument for changing the model: when consumption costs the resident nothing, nothing constrains it. That is not a claim about any household in particular — it is what happens to any shared resource with no meter on it.

The Three Models

Every park uses one of these three, sometimes a different one per utility — water submetered, trash bundled, electricity billed by the utility to the resident's own account.

Model	How it works	What it takes to run	Where it goes wrong	Typically suits
Bundled into lot rent	The park pays the utility and charges one monthly amount covering the lot and the utilities named in the lease.	Nothing beyond collecting the rent. One charge, one date, one lease line.	Every rate increase and every leak lands on the operator until the next rent adjustment, and waste is undetectable.	Smaller parks, parks with no per-lot metering, operators who prefer simplicity over margin protection.
Allocated by formula	The total bill is divided across occupied lots by a stated formula — occupancy count, home size — and billed separately.	A defensible formula, a monthly calculation, a per-lot statement, disclosure of the method before tenancy.	It charges households for consumption that is not theirs, which is hard to defend. Restricted in some states, prohibited in others.	Parks where metering each lot is not feasible — and only where the method is clearly permitted.
Submetered by usage	A meter at each lot records actual consumption; the park reads it and bills that household for what it used.	Meters and the capital to install them, a reading process, a monthly calculation, per-lot statements, a dispute process.	Meter failures and reading errors become billing arguments. Older lines may need replacing before meters are viable.	Parks with a large water and sewer cost line, sound infrastructure, and capital for the project.

A fourth arrangement is worth naming: in some parks the utility serves each lot directly, holds the account with the resident, and bills them without the park in the middle. Where that is the case there is no recovery decision to make — only lot rent. Settle which arrangement you have during mobile home park due diligence, not after closing.

This guide is general information, not legal advice. Utility pass-through is regulated, and the rules differ substantially from state to state — covering whether a markup is permitted, what administrative fee if any may be charged, which allocation methods are allowed, what must be disclosed before tenancy, and how submeters must be maintained. Some states regulate parks that resell utilities through the public utility commission rather than under landlord-tenant law. Verify the rules where your park is located with your state's utility regulator and an attorney before you bill anything back to a resident.

What Submetering Actually Requires

Submetering is usually described as a decision. In practice it is a construction project followed by a permanent monthly obligation, and operators who underestimate the second half tend to abandon it a year in. Six separate things have to work:

A meter at every lot, and the capital to install them — equipment plus trenching plus labor plus permits, priced per lot and multiplied across the community. Costs vary far too much by region, meter type, and site condition for any published figure to be worth planning against; get local bids.
A reading process you will still be doing in year three — either someone walks the park monthly, or you pay more upfront for remote-read meters. The manual route looks cheaper until you miss a month and have to estimate, which is where disputes begin.
A monthly calculation — consumption per lot converted into an amount owed, at whatever rate structure your state permits, reconciled against the master bill so what you bill out bears a defensible relationship to what you were charged.
A per-lot statement a resident can check — prior reading, current reading, consumption, rate, and total. A bill showing only an amount is the most reliable way to generate complaints and, in some states, a compliance problem.
A dispute process — a written path for a resident who believes a reading is wrong: who re-reads the meter, how a faulty one is handled, how a corrected bill is issued. Meters do fail, and the park owns them.
Compliance with your state's rules — what may be charged, whether an administrative markup is permitted and capped, what accuracy standard the meters must meet, and what has to be disclosed to a resident before they sign.

One more thing catches buyers of older parks: metering assumes the distribution lines can be isolated per lot and are not themselves leaking. A park losing water between the master meter and the homes will submeter its way to a permanent gap between what it is billed and what it can bill out, because the loss belongs to the infrastructure rather than to any household. Line condition therefore comes before metering in the sequence, and it is physical work covered by mobile home park maintenance rather than a billing decision. If you are still evaluating a purchase, establish it before closing — see how to buy a mobile home park. The EPA's overview of public water systems is worth reading too, because a park that produces or distributes its own water may itself qualify as one.

Getting the Model Into the Lease

Whichever model you use has to be stated in the lot lease in terms a resident can read without help: which utilities the monthly amount covers, which are billed separately, on what basis they are calculated, when they are due, and what happens if they are not paid. Where your state requires disclosure of the billing method before tenancy begins, that disclosure is not optional.

Changing the model mid-tenancy is the harder case. Moving a park from bundled to submetered changes what the resident pays for and how much, which generally requires notice and may be restricted outright — some states treat a shift in the utility structure much as they treat a rent increase. If the change also means adjusting the lot rent downward to reflect what is no longer included, that interacts with your state's notice rules too; the mechanics are covered in raising lot rent.

Ambiguity in this clause produces more disputes than any other term in a park lease, because it recurs monthly and both parties can read it in good faith and reach different answers. Start from a written mobile home lot lease agreement rather than a verbal understanding, and read it against mobile home park tenant rights in your state. The arrangement can also differ between park-owned and tenant-owned homes, since a park-owned home is a rental of the structure as well as the ground.

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Where Kelpic Fits, and Where It Does Not

This section exists because operators ask, and the answer should not require a sales call. Kelpic® does not read meters, calculate usage, allocate costs between lots, or produce utility statements of any kind. A park that bills residents for measured or allocated usage will run that part of its operation on a separate submetering and billing system, chosen from the providers who specialize in it.

What Kelpic covers is the lot rent side of the same park. Each lot is set up as a unit with a resident, a lease, and a recurring monthly charge. Residents pay online through the portal — see rent collection — and delinquency is visible as who is behind and by how many days, across one park or several from a single login. Late fee rules are configurable to match your lease and what your state allows. Applications come in online with FCRA screening consent collected in the application, and residents submit maintenance requests through the portal.

One honest consequence of that boundary: a park bundling utilities into a single monthly amount has the simpler setup, because there is one recurring charge per lot and nothing changes month to month. A fixed amount agreed in the lease — a flat utility allowance folded into what the resident pays — is simply part of that charge. A usage-based bill recalculated every month is not something Kelpic produces.

If that division works for your park, mobile home park management software covers the rest of what Kelpic does, lot rent covers the charge itself, and pricing shows what it costs by unit count. If it does not, that is a legitimate answer and you have lost nothing by finding out here.

Choosing a Model

No model is correct for every park, and an operator who tells you otherwise is describing their own. Five questions get you to a defensible answer.

How is the park metered today, and what would changing it cost? Master-metered with no per-lot infrastructure is a very different starting point from a park where meter pits already exist.
What does your state permit? This can eliminate options before you evaluate them. Some methods are restricted, some prohibited, some carry disclosure or fee limits that change the arithmetic.
How large is the water and sewer line relative to revenue? Pull twelve months of utility bills against twelve months of collected rent. If it is a small share, metering may never repay the disruption. If it is a large one, doing nothing is the costly choice.
Do you have the capital and the appetite? Not just the installation, but the monthly obligation that follows it — readings, statements, disputes — for as long as you own the park.
How would your rent compare locally under each model? A bundled rent looks higher in a listing even when the resident's total cost is identical, and prospective residents compare headline numbers. Survey nearby parks and normalize for inclusions, as described in lot rent.

For an owner still building the model rather than operating it, the utility decision belongs in the underwriting — both mobile home park investing and the mobile home park business plan guide treat it as an assumption to state explicitly. Federal manufactured housing standards sit with HUD's manufactured housing program.

The Short Version

Establish how the park is metered today — master, per-lot, or served directly by the utility
Confirm what your state permits before you evaluate models, not after
Pick one model and write it into the lot lease in terms a resident can check
Price the lot rent to match the model, and compare to nearby parks on the same basis
Run usage-based billing on a system built for it, and keep the rent side where the leases and payments already live

Frequently Asked Questions

How do mobile home parks bill for water?

In one of three ways. Some parks fold water and sewer into lot rent, so the resident pays a single monthly amount and the park absorbs whatever the utility bills. Some allocate the park's total bill across occupied lots using a formula — commonly occupant count or home size — and bill each lot its share. Some install a submeter at each lot, read it monthly, and bill each household for what it actually used. Which of these a park may use is not purely an operating preference: several states regulate how a landlord may pass utility costs through, and some restrict or prohibit particular allocation methods outright. Confirm the rules where the park is located before choosing.

What is submetering in a mobile home park?

Submetering means the park holds the master account with the utility, and a second meter — the submeter — sits on the service line to each individual lot. The utility bills the park for the whole community; the park reads each submeter and bills each resident for that lot's measured consumption. The submeters are the park's equipment, not the utility's, so the park installs them, maintains them, reads them, and is responsible for their accuracy when a resident disputes a reading. Many states set requirements covering submeter accuracy, what may be charged, and what must be disclosed before tenancy begins.

Can a park charge residents for utilities?

In most places, yes, within limits set by state law — but the limits are the whole story and they vary enormously. Depending on the state, rules may govern whether any markup over actual cost is permitted, whether an administrative fee may be added and how large it may be, which allocation methods are allowed, what the lease must disclose, and what notice is required before the billing model changes. A few states regulate parks that resell utilities under their public utility commission rather than under landlord-tenant law, which brings separate obligations. Verify with your state's utility regulator and an attorney familiar with mobile home tenancies before you bill anything back.

What is RUBS?

RUBS stands for ratio utility billing system. It is an allocation method rather than a measurement method: instead of metering each lot, the park divides its total utility bill across occupied lots using a formula — occupant count, home size, bedroom count, or some combination. It is attractive because it needs no meters and no capital project. Its weakness is that it charges people for consumption that is not theirs, so a careful single resident subsidizes a household with a running leak, and the formula is hard to defend in a dispute because it is not measuring anything. That is exactly why several states restrict RUBS-style allocation and a few prohibit it. Treat its legality as a question to answer locally, not an assumption.

Does Kelpic do utility billing?

No. Kelpic does not read meters, calculate usage, allocate costs between lots, or produce utility statements of any kind. A park that bills residents for measured or allocated usage will run that on a separate submetering and billing system. What Kelpic covers is the lot rent side: each lot as a unit with its resident, a lease, and a recurring monthly charge, rent collected online, and a view of who is behind and by how many days. A park that bundles utilities into a single monthly amount agreed in the lease has a simpler setup, because there is only one recurring charge to track.

Should I submeter my mobile home park?

That is a decision rather than a recommendation, and it turns on five questions. How is the park metered today, and what would changing it cost in line work and equipment? What does your state permit? How large is the water and sewer cost line relative to revenue — a rounding item, or the largest thing you can influence? Do you have the capital and the appetite to run an infrastructure project rather than change a setting? And how would your lot rent compare to nearby parks under each model, given that a bundled rent looks higher in a listing even when the resident's total cost is identical?

Keep the Lot Rent Side Simple

Kelpic gives every lot a resident, a lease, and a recurring monthly charge, collects rent online, and shows who is behind and by how many days. Utility usage billing runs elsewhere, and we would rather tell you that now.

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