On September 25, 2016, Governor Jerry Brown signed into law Senate Bill 7 (SB 7), which requires owners of multi-unit residential and mixed use developments to install individual water meters that measure the quantity of water supplied to each unit. This law applies to all units constructed after January 1, 2018.

Currently, a residential or mixed-use development's landlord is typically the water customer, which allows the water purveyor to administer service to one customer, rather than to each individual unit. This system created a concern that individual tenants are not receiving information regarding their water usage that could lead to water conservation.

California is still in a period of severe drought, and the presence of individual water meters, or submeters, has been shown by several studies to significantly decrease water usage by around 15%. The state already enacted legislation mandating installation of individual meters, but individual residential units in multifamily buildings were not required to be separately metered (see Assembly Bill 2572). SB7 amends and expands upon the current standards.

SB 7 requires property owners of new multi-unit residential, commercial, and mixed use buildings to install submeters. Owners are required to ensure compliance with the implementation of the meters, including:

Several types of properties are exempt from the requirements of SB 7. These include:

Although this law does not goes into effect until January 2018, property owners and developers should start their preparations now.

Developers should account for the added building and design costs associated with the installation of water meters in each unit.

Property owners should also devise a plan to implement or maintain existing individual metering systems, including adding the appropriate disclosure language to rental agreements where tenants are charged separately from rent for water service.