Minnesota’s New Shared-Meter Utility Laws: Landlord Guide for 2025

Minnesota has enacted significant changes to utility billing laws for multi-unit buildings with shared meters, effective January 1, 2025. These changes (found in Minnesota Statutes § 504B.216 and §§ 216B.022–216B.024) aim to protect tenants from unfair utility charges and clarify landlords’ responsibilities. Below is a summary of what landlords can and cannot do under the new laws, how submetering and apportionment (ratio billing) are regulated, required lease disclosures and billing practices, the penalties for noncompliance, and practical steps to prepare. The tone is straightforward and non-legalistic, to help property owners quickly grasp their new obligations.

What Landlords Can and Cannot Do Under the New Law

• Utility Accounts in the Landlord’s Name: Landlords in shared-meter buildings must contract directly with the utility provider and pay the utility bills themselves. You cannot require individual tenants to set up utility accounts for a master-metered service. Landlords are also required to notify the utility company that the property is a shared-metered building. This prevents any attempt to shift responsibility to tenants or remove a tenant’s name from an account to avoid payment.

• No Utility Shutoffs by Landlords: The new rules explicitly prohibit landlords from disconnecting a tenant’s utility service because of nonpayment of that tenant’s utility charges. In other words, you cannot shut off the heat or power to a tenant’s unit as a self-help method to collect unpaid utility fees. If a tenant pays you partial money that includes rent and utilities, you must apply the payment to rent first, then utilities. Failing to pay utility charges is also much harder to use as a lease violation for eviction – the law limits when nonpayment of utilities can be deemed a breach, and courts will delay or deny eviction if a tenant has a pending Public Utilities Commission (PUC) complaint about the bill.

• Fee Caps and No Extra Charges: Landlords can only charge limited fees related to utility billing. Administrative billing fees (for processing bills) are capped at $8.00 per billing period, and late fees for utility charges are capped at $5.00 per month total (no matter how many utilities are billed). No other add-on fees are allowed. Notably, you cannot charge tenants any “submeter fee” or other costs for installing, maintaining, or reading utility submeters (except if a tenant’s deliberate damage to a meter caused an expense). This means expenses like equipment costs or meter reading services must be built into your rent or the $8 admin fee limit – they cannot be passed through separately to tenants.

Submetering and Apportionment Rules

Submetering: Many landlords use submeters to measure each unit’s utility usage in a building that has a single master meter. Under the new law, if you install new submeters for electricity or gas after Jan 1, 2025, they must meet industry accuracy standards (ANSI). All existing submeters, regardless of age, must accurately measure the utility service – accuracy is required by law. If a tenant writes to you suspecting their submeter is faulty, you must promptly investigate and either fix/replace the meter or explain in writing why you believe it’s accurate. If the meter was indeed inaccurate and overcharged the tenant, you must refund the overpaid amount promptly. If the meter under-recorded (meaning the tenant was undercharged), you are allowed to bill the difference – but only going back a maximum of six months and with a required payment plan option for the tenant to catch up. Crucially, as mentioned above, you cannot tack on any special “submeter maintenance” fees beyond the modest allowed admin/late fees.

Also, by law landlords who use submeters are now subject to PUC oversight. This means tenants can file complaints with state regulators about submetered utility billing. If you use a third-party billing company to handle submeter reading and billing, note that the statute defines such third-party agents as part of the “landlord” for purposes of these rules. In short, you as the property owner are responsible for your billing agent’s compliance as well. Make sure any vendor you use follows Minnesota’s requirements (no unauthorized fees, timely billing, etc.).

Apportionment (Ratio Utility Billing): Some landlords bill tenants by apportioning a master utility bill among units (sometimes called Ratio Utility Billing Systems, or RUBS) instead of actual meters. The new law bans apportioning electricity costs among multiple units entirely for leases starting on or after Jan 1, 2025. You may no longer divide one electric bill by square footage or any other method – if units don’t have individual electric meters or submeters, you’ll have to include electricity in the rent or otherwise restructure, because separate electric charges to tenants cannot be based on an arbitrary formula.

Apportionment is still allowed for natural gas and for water/sewer, but the legislature has set strict formulas that must be used. For natural gas, if you can’t measure usage with individual meters, you must split the gas bill by each unit’s square footage as a proportion of the total residential space. In doing so, you must exclude any square footage that isn’t part of a tenant’s living area – common areas, management or maintenance spaces, and vacant units are not to be counted. So the formula is essentially: (Unit Square Footage ÷ Total Occupied Unit Square Footage) × (Total Gas Bill minus any landlord/common area usage). For water and sewer, the required apportionment method is based on occupancy: you divide the bill according to the number of people on each unit’s lease as a fraction of the total number of residents in the building. Again, you must exclude water used for common areas, landscaping, building maintenance, or amenities like laundry rooms or pools – tenants only pay for their share of actual residential use.

In both gas and water billing, the law also says you must deduct any credits or discounts the utility provider gives (for example, if the utility bill had a refund, rebate, or adjustment, each tenant should get their proportional share of that credit). Likewise, tenants can only be charged for “nonusage” fixed fees (like service charges, taxes, etc.) in pro-rata share – for instance, if there’s a $50 monthly service charge on a water bill for the whole building, each unit should only pay a portion of that $50 equal to their share of the usage or occupancy. The bottom line is that landlords have no discretion to invent their own billing formulas – the methodology is now fixed by statute to ensure fairness.

Required Lease Disclosures and Billing Practices

Because of these changes, leases signed or renewed on or after January 1, 2025 must include a disclosure attachment if you bill tenants for shared utilities (any apportionment of gas or water/sewer). The law even provides specific language for a “Utility Bills” notice that you should attach to the lease. This notice explains in plain terms how the tenant’s bill is calculated and what their rights are. It states, for example, that for natural gas the tenant’s share is based on unit square footage, and for water it’s based on number of occupants, and that tenants are not charged for utilities in common areas or the landlord’s spaces. It also mentions the caps on late fees ($5) and billing admin fees ($8) so the tenant knows those charges are limited by law. Additionally, the notice informs tenants of their right to a reasonable payment plan if they fall behind, their right to see the actual utility company bills upon request, and their option to seek help from the PUC’s Consumer Affairs Office if there’s a billing dispute that can’t be resolved directly. Make sure to include this attachment with every new lease or renewal where you charge for utilities separate from rent.

Billing frequency and transparency: The new statute requires that you bill tenants for utilities at the same frequency that you yourself receive bills from the utility provider. In practice, most utilities bill monthly, so you should send utility invoices to tenants monthly as well (no “quarterly” billing or random delays that could lead to large surprise bills). Your lease or a written notice at move-in should clearly state when the tenant can expect their utility bills (e.g. “you will receive a bill for water/sewer charges each month when rent is due”).

Each bill you give the tenant must also itemize important information. For submetered services, the bill should show the current and prior meter readings and the dates of the readings. Every bill (whether based on submeter or apportionment) should list the rate being charged (e.g. the utility’s price per kWh or per gallon) and how the charge was calculated, the tenant’s share of any taxes or surcharges, and the tenant’s share of any credits or adjustments on the utility’s bill. If you charge an administrative billing fee (up to $8) or any late fee (up to $5), those must be listed on the bill as well. Finally, include the total amount due and the due date, along with when a late fee would apply if not paid by that date. Transparency is key – tenants should be able to see exactly how their portion was determined and that it matches the formula and the actual utility charges. Moreover, if a tenant requests it, you must provide copies of the actual utility provider bills for the building (for at least the past two years, or since you acquired the property if more recent) so they can verify the amounts. Keeping good records and being ready to share them will be important under these new rules.

Penalties for Noncompliance

Landlords who ignore these requirements face serious consequences. Minnesota’s Public Utilities Commission now has authority to handle tenant complaints about landlord utility billing and enforce these rules. The PUC can investigate and impose fines for violations – penalties can range from $100 up to $1,000 per violation of the statutes (each incorrect bill or illegal charge could count as a separate violation). That can add up quickly if multiple tenants are affected each month.

Beyond regulatory fines, violating the shared-meter laws also constitutes a breach of the landlord’s duties under the landlord-tenant act. Tenants may be able to withhold rent or take legal action if a landlord is charging utilities improperly or not following the statute. The Minnesota Attorney General’s office has pursued landlords in the past for unlawful utility billing practices, resulting in significant financial judgments. For example, one large landlord faced over $5 million in tenant restitution for illegal utility billing affecting thousands of renters. In short, noncompliance not only risks PUC fines but also potential lawsuits, lease termination defenses, and liability under consumer protection laws. It’s far better to comply upfront than to face these penalties later.

It’s also worth noting the eviction restrictions again: A landlord cannot evict a tenant solely for failing to pay separately billed utilities unless very specific steps are taken. You must first offer a reasonable payment plan and the tenant must miss at least two payments on that plan before it’s considered a lease breach. Even then, certain conditions pause your ability to evict – you cannot evict for utility nonpayment during Minnesota’s winter shut-off protection period for heat (typically October through April for heat-related utilities) or during a declared heat emergency in summer. And if the tenant or a household member has a medical emergency or uses life-sustaining medical equipment that requires electricity, and they provide a doctor’s note, the eviction for utility nonpayment must be stayed as well. These align with protections that utility companies must give direct customers and now apply to landlords’ billing too. Essentially, the state wants landlords to work with tenants (via payment plans and PUC mediation) rather than immediately resorting to shutoffs or evictions over utility bills.

Practical Steps for Landlords to Prepare (Before Jan 1, 2025)

• Audit Your Utility Billing Setup: This fall, review all your properties to see where you have shared meters or ratio billing. Identify any cases where you currently allocate electric bills among units – you will need to change that practice by 2025, since electric apportionment will be illegal for new leases. Options might include installing actual submeters for each unit’s electricity, converting the billing so the utility company bills each unit directly (if possible), or simply including electricity costs in the rent going forward. For gas and water, ensure you have the data needed for the new formulas (know each unit’s square footage and occupant count) and adjust any billing software or spreadsheets to use the exact methods required by law.

• Upgrade or Calibrate Submeters: If you use your own submeters for any utilities, verify that they are accurate and up to standard. For water submeters, check with your local water utility on their meter standards – any new water meters you install after January 1 must meet the local utility’s specs. It’s wise to have existing meters tested or calibrated if they are old. Document your submeter readings and keep logs, so you can demonstrate accuracy if questioned. Also, put in place a procedure for responding if a tenant complains about a meter – know who will investigate and what steps to take (e.g. contacting a meter testing service). Being proactive will help avoid disputes and show good faith compliance.

• Update Lease Forms and Disclosures: Work with your legal counsel or property management advisor to update your lease templates. You’ll need to add the “Utility Bills” addendum with all required language about how bills are calculated and tenant rights. Make sure the lease or an attached sheet also tells tenants when to expect their utility bill each period. Double-check that any language about late fees or admin fees in your lease aligns with the new $5/$8 limits (for example, if your old lease allowed a $20 late fee for utilities, that must be changed). Remove any lease clauses that conflict with the new law (for instance, a clause saying the tenant waives the right to contest utility bills would be invalid now). It’s a good idea to include a clause that reiterates the payment application rule (that rent gets paid first) so tenants are aware.

• Train Your Staff and Billing Agents: Ensure that anyone involved in preparing or sending utility bills – whether your property manager, bookkeeper, or a third-party billing service – understands these new requirements. Go over the mandated billing format: the bill needs to show readings, rates, and calculations clearly. Emphasize the fee caps and that no miscellaneous “service charges” can be added beyond what’s allowed. Also train staff on handling delinquencies: they should offer a written payment plan before threatening any lease action, and know the circumstances under which you cannot file an eviction for utility nonpayment. It may help to create a simple internal checklist or script for responding to tenant questions (e.g. if a tenant says “my bill seems high,” staff can check if the tenant wants copies of the utility’s bill or a meter test). Being responsive and transparent will go a long way in this new environment.

By taking these steps now, Minnesota landlords can ensure they are in full compliance by the time the new shared-meter utility laws take effect. The goal of these changes is to make utility billing more fair and transparent for renters, so aligning your practices with that goal will ultimately benefit your landlord-tenant relationships as well. Noncompliance is simply not worth the risk given the penalties and potential disputes.

For a deeper dive into the details of the law (including the exact statutory language and examples), please refer to the full presentation linked below. It contains a comprehensive walkthrough of the changes and can serve as a reference as you update your policies. [Download Full Presentation]