Water and sewer charges for common area irrigation, lobby restrooms, cooling towers, and other shared utility uses.
Key Takeaways
| Lease Type | Recoverable? | Controllable? |
|---|---|---|
| NNN | Yes | No |
| Modified Gross | Yes | No |
| Full-Service Gross | No | No |
Approximate budget share: 2-5% of total CAM pool.
Common area water and sewer charges cover consumption in shared spaces including lobby restrooms, exterior irrigation, cooling towers, and common-area mechanical systems. Under NNN leases, tenants pay their pro-rata share of these costs. The primary overcharge risk arises from two sources. First, without sub-metering, landlords cannot isolate common area consumption from tenant suite usage. Landlords estimate the split using SF ratios or flat allocations, which regularly overstate common area consumption relative to actual use. Second, undetected underground water leaks or failed irrigation heads can drive utility bills to multiples of normal consumption before the issue is identified and repaired. When a landlord allows a known or easily discoverable leak to continue, the excess water cost is not a legitimate operating expense. It is a consequence of the landlord's failure to maintain the property. Tenants are entitled to challenge the leak-driven costs for the period from discovery to repair. Gallonage data and prior-year consumption comparisons are the strongest evidence for this dispute. Cooling tower make-up water is a particular watch area because it can account for a disproportionate share of water costs in multi-story buildings.
Overcharge Risk
$1,000-$15,000/year
typical annual overcharge when this line item is disputed
An undetected underground water leak drives massive utility bills that are passed through as operating costs rather than being addressed as a landlord maintenance failure. Tenant suite water is bundled with common area water without sub-metering.
| Legitimate Charge | Suspicious Charge |
|---|---|
| Water costs consistent with prior-year consumption and sub-meter verified | Water cost spike of 50%+ with no explanation and no documented leak repair |
| Common area consumption isolated by sub-metering from tenant suite usage | Aggregate building water billed pro-rata SF with no sub-meter separation |
| Irrigation and restroom water costs in line with property size and occupancy | Cooling tower water billed without separate metering or independent verification |
Demand sub-meter data isolating common area water consumption. Challenge excessive water costs arising from undetected leaks as a consequence of landlord's failure to maintain the property. Request utility bills and gallonage reports to verify the charges reflect actual common area consumption.
Check Your Water & Sewer (Common Area) Charges
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