Water Charges in NZ Rentals: What Landlords Can (and Can't) Charge

The short version: you can charge your tenant for metered water and wastewater consumption that is attributable to their use of the property, but only if the property is separately metered and the provider charges by consumption. You cannot pass on fixed line charges or the rates-funded part of the bill; those stay with you. Get the split wrong and you are either out of pocket or unlawfully overcharging, and the second one is a Tribunal claim waiting to happen.

If you are a landlord working out what you can put on the tenant, or a tenant staring at a water bill that looks too high, this tells you exactly where the line sits under s.39 of the Residential Tenancies Act (Tenancy Services - Water charges). I have split these bills by hand on my own places, so I will show you the part most people get wrong, and how RentManager keeps the on-chargeable usage separate from what you absorb.

What Is the Basic Rule for Charging Tenants for Water?

A landlord can require a tenant to pay for metered water or wastewater usage if and only if:

1. The property has a water meter that measures the property's consumption separately from other properties, and
2. The water is metered and charged on a consumption basis by the local council or water provider.

If both conditions are met, the landlord can pass the metered usage charges to the tenant when the charges can be exclusively attributed to that tenancy. This can include a wastewater consumption charge calculated from the property's metered water use.

Fixed charges need a separate check. If the supplier charges the fixed amount regardless of whether the property is occupied, the landlord pays it. If the supplier charges a fixed amount only while the property is occupied, the tenant may be responsible for it. Watercare's fixed wastewater charge applies whether or not an Auckland property is occupied, so it remains the landlord's cost.

The landlord cannot pass on:

• Fixed water supply charges (line charges, base charges)
• Any portion of water charges that is not based on actual usage
• Fixed wastewater, sewerage, or other network charges that apply regardless of whether the property is occupied

What If the Property Doesn't Have a Separate Meter?

If the property shares a meter with other units (common in older apartment buildings or some townhouses), the landlord cannot charge tenants for water at all. All water costs are the landlord's responsibility.

In these situations, the water cost is factored into the rent. When tenants ask why they pay for water at one property but not another, this is usually why.

How Do You Set Up Water Billing Correctly?

If you are entitled to charge for metered water or wastewater usage:

1. Include a clause in the tenancy agreement stating that the tenant is responsible for the permitted metered usage charges
2. When you receive the water bill, separate the usage portion from any fixed charges
3. Invoice the tenant for the usage portion only, with a copy of the relevant section of the council invoice as evidence

Do not just forward the full council water invoice and ask for payment. Fixed charges must be deducted first, and failure to do so is a recoverable overcharge under the RTA.

Auckland and Wellington: Key Differences

Water billing varies by council and provider. In Auckland, Watercare separates water consumption, wastewater consumption, and the fixed wastewater charge. The metered wastewater consumption charge can be passed on where it is attributable to the tenant's use, but the fixed wastewater charge cannot. The same distinction applies nationwide: do not label an entire wastewater line as either recoverable or non-recoverable without checking whether it is usage-based or fixed. Watercare's residential charges guidance explains the Auckland bill split, while Tenancy Services' national guidance explains when metered wastewater can be attributed to the tenant.

In Wellington, Wellington Water issues invoices to property owners. The breakdown of usage vs. fixed charges is on the invoice. Check before charging.

Some smaller councils bundle water and sewerage into a single unmetered rate (a flat annual charge included in council rates). In these cases, there is no metered usage to pass on, and the landlord bears the full cost.

What Happens If You Overcharge for Water?

If a landlord overcharges for water - for example, by including a fixed charge that applies regardless of occupancy - the tenant can apply to the Tenancy Tribunal for a refund. The Tribunal can also award exemplary damages in clear cases of wilful non-compliance.

Keep records of every water invoice and how you calculated the tenant's portion. If challenged, you need to show exactly what was charged and why.

How Do the Healthy Homes Standards Relate to Water?

The Healthy Homes Standards do not directly regulate water billing, but they do require adequate drainage and the elimination of moisture ingress - issues that can arise from plumbing defects. A landlord who passes on water charges for a property with leaking pipes may face both a water billing dispute and a Healthy Homes compliance issue.

Tracking water bills, passing on the right amount, and keeping records of invoices is time-consuming across multiple properties. RentManager lets you attach documents to tenancies and properties, making it straightforward to keep your billing records in order. See the rental accounting workflow for supported expense record and Xero details. If a bill suddenly looks far too high, that is a different problem: see who actually pays when a leak blows out the bill.