What Utilities Should be Shared With Your ADU?

When building an ADU, one of the most important considerations involves determining which utilities you’ll want to share with the primary house. This decision generally will depend on local regulations, investment costs, and long-term plans for the property. Many prospective tenants see shared utilities as a benefit, and when done right, they can help to keep tenants happy in the long run. Some utilities, such as trash and recycling, are tied to the property rather than the individual housing units, which makes sharing the utility easier. However, not every utility is the same.

Today, we’ll go over the common utilities that are shared with ADUs as well as tips on how to manage sharing said utilities among both units.

Water

Water is among the most commonly shared utilities between ADUs and primary residences. Typically, this needs less construction work than installing an entirely new connection, which can reduce the upfront costs and may simplify the process of permits in Southern California. If at some point the expense becomes too much, or there are other issues involved with sharing water with your ADU, you can consider installing sub-meters, which can track the usage of the water.

Electric

Similar to water, electricity is another utility that can be shared between the main home and the ADU. Homeowners often choose to maintain a single electrical meter for both units, as it reduces installation costs and eliminates the need for a new service connection, which can delay a building project. In situations where billing separation is necessary, electrical sub-metering can be added to measure how much power the ADU is consuming without fully opening a new utility account with the electric company. This approach provides a middle ground between costs and savings, though it may require extra work to calculate expenses.

Natural Gas

Since most homes use gas for heating, cooking, and hot water, it's possible to extend an existing gas line to the ADU, saving money by not installing a new meter. Unlike electric and water, sub-metering of gas is less common. Homeowners need to weigh the long-term benefits and implications before opting to share this utility.

Internet Access

Internet access has become increasingly more necessary for day-to-day activities. Luckily, it's relatively easy to share, needing Wi-Fi extenders in most cases. This solution is simple and cost-effective. Additionally, if you’ve installed smart home technology in the ADU, internet access is a must. Security measures such as guest networks can help maintain privacy between the primary home and the ADU.

Managing Shared Utilities

For landlords looking to share utilities between the main home and the ADU, there are a few practical steps that can help manage the costs and prevent future issues with your tenants. The aforementioned sub-metering for water and power can provide accurate use data for the ADU without the need for separate service lines. You can use this to adjust the utility costs to your tenant based on how much they spend, or set a flat rate with the usage in mind. Property management companies can take care of these clauses in the lease agreement.

Lease agreements need to clearly outline the utility arrangements, as well as how they can be changed when renting the ADU. Landlords need to specify whether utilities are included in the rent or billed separately based on the sub-meter data. Having this information clearly stated on the lease agreement reduces the likelihood of disputes with your tenants in the future.

Deciding whether to share utilities for an ADU depends on costs, property layout, and long-term goals. While sharing utilities can reduce initial expenses, assessing usage needs and local regulations ensures the most practical utility setup for both units. If you have questions about sharing utilities with your tenants or if you need help managing your Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our Owner Application online.