Water usage billing compliance guidelines for NSW landlords

A water bill’s issue date starts a strict clock for passing usage charges to a tenant. These water usage billing compliance guidelines for landlords in NSW centre on two deadlines: request payment within three months of the water authority issuing the bill, and give the tenant at least 21 days to pay. A tenant can be charged only for water they use, so water consumed in common areas shouldn’t be treated as their individual usage.

It’s easy to focus on the meter reading and overlook the notice, but timing and clear records matter too. This guide explains when tenants can be charged, what evidence to provide, how to record readings at the start and end of a tenancy, and what to do if a bill is disputed or unpaid. These steps help keep the process clear.

You’ll also learn how NSW water-efficiency requirements affect a landlord’s ability to pass on usage charges, and why common-area water must be handled carefully when calculating an individual tenant’s share.

What is a percentage water charge and how is it calculated?

A “percentage water charge” is not a separate NSW billing category or a fixed share of the landlord’s water bill. Tenants may be charged eligible water usage, but the amount must relate to water used at their premises. Simply allocating part of a combined bill does not show that the percentage reflects the tenant’s consumption.

To assess a charge, identify the water usage amount on the supplier’s bill and the premises and billing period it covers. The tenant’s liability cannot exceed the amount the landlord must pay for that tenant’s water use. Don’t count fixed supply costs or water used by other households as the tenant’s consumption. If a bill combines usage with other charges, separate the usage component before requesting payment.

Percentage allocations are especially unreliable when a meter serves multiple dwellings or shared facilities. A common garden or laundry, for example, may use water recorded on the same meter as a tenant’s home. Dividing the total bill between occupants could make one tenant pay for water used elsewhere. Base the calculation on usage attributable to that tenant, not a convenient split.

The landlord remains responsible for water supply service charges other than water usage charges, and sewerage supply service charges other than pump-out septic service charges. If the landlord receives a rebate for water usage, its benefit or an equivalent amount must be passed on to the tenant. Account for the rebate when calculating the amount sought.

Evidence matters as much as the calculation. NSW Fair Trading advises landlords and property managers to rely on a separate bill from the water supply authority when passing on usage charges. Give the tenant a copy and clearly identify the usage amount requested. NSW Fair Trading advises landlords and property managers to rely on a separate bill issued by the water supply authority when passing water usage charges on to tenants.

Section 39 of the Residential Tenancies Act 2010 concerns tenant liability for water usage charges. The tenancy agreement should record the tenant’s obligation before signing. Where a tenant questions a charge, compare the amount requested with the supplier’s bill, the premises and the period covered. This helps identify whether the issue concerns the calculation, the bill period or water that may have been used elsewhere.

Landlords and tenants can find current NSW Fair Trading water-charging guidelines and forms in its residential tenancy resources. Use these materials to understand the relevant process and paperwork for a water usage request.

• Base the request on eligible usage, not an arbitrary percentage.
• Separate consumption from service charges and shared-area use.
• Keep the supplier’s bill with the calculation and tenant request.

Recording water meter readings at move-in and move-out

Record the meter reading on the condition report at the start and end of each tenancy. The opening reading establishes the baseline; the closing reading helps identify consumption during the tenancy. The landlord or managing agent arranges a meter reading when the tenant moves out, so final usage can be assessed against the tenancy dates.

At the ingoing inspection, record the date, reading and meter identification on the condition report. If the property has more than one meter, identify which one serves the tenant’s premises. Keep the entry legible and give the tenant a chance to review the report. A dated photo of the display can support the written record if the figures are later questioned.

Repeat the process at the outgoing inspection, using the same meter. Record the final reading and date before the next tenancy begins, then keep the outgoing report with the incoming record. Comparing the readings creates a clear handover and helps prevent the previous occupant’s consumption being assigned to the next tenant.

Match each reading to the relevant bill period before assessing final usage. A supplier’s bill may cover dates that do not align exactly with the tenancy. Move-in and move-out records help establish occupancy dates, while the bill and tenancy documents provide context for the amount under review.

Document shared meters carefully. Note whether the meter also serves common facilities or other dwellings, as its total reading may include water used beyond one household. A sub-flow meter can help record part of the consumption, but keep its figures separate from the authority’s meter reading and bill. Don’t present a shared total as an individual tenant’s reading.

If a meter is inaccessible, damaged or difficult to read, note this during the inspection and arrange a reliable reading for the relevant tenancy handover. Don’t substitute an estimated figure without identifying it as an estimate. Clear notes stating what was observed, when it was recorded and which meter was checked make later comparisons more useful.

• Record the date, meter identity and displayed reading at both inspections.
• Keep photos and condition reports with the matching tenancy file.
• Mark shared-meter or sub-flow readings distinctly from the authority reading.

Consistent records can sit alongside routine rental administration. Landlords seeking support with property management in Blacktown can consider how meter documentation fits their broader tenancy process.

Water-billing notice and payment deadlines

In NSW, a landlord or agent must request payment of water usage charges within 3 months after the water authority issues its bill. Once the request is made, the tenant must have at least 21 days to pay. These are separate time limits: one governs when the landlord must seek payment, and the other sets the tenant’s minimum payment period.

Start by recording the bill’s issue date, not the date it arrives in an inbox or is forwarded to a property manager. Use the issue date to track the three-month window. Keep the supplier’s bill, the key supporting record, with the tenant’s notice and proof of when the request was sent.

The notice should state the water usage amount requested and include the supplier’s bill. This lets the tenant compare the charge with the water authority’s document instead of relying on an unexplained figure. Clearly state the amount, payment deadline and billing period. Water usage charges should be paid separately from rent.

The Residential Tenancies Act 2010 sets the NSW framework for water usage charges. If the landlord or agent doesn’t request payment within 3 months after the bill is issued, the tenant isn’t required to pay that charge. A late notice alone doesn’t restore the tenant’s liability after that deadline has passed.

There is an important distinction if the landlord made a timely request. A landlord may pursue the water usage charges after the three-month period when payment was first sought within that period. The initial request date therefore matters, even if the tenant’s 21-day payment period extends beyond the three-month window.

For example, if an authority issues a bill and the landlord sends a payment request before the three-month deadline, retain the dated request. If the tenant hasn’t paid by the end of the stated 21-day minimum, the landlord can rely on the timely request when following up. The authority’s issue date, request date and payment due date each serve a different purpose.

• Record the bill’s issue date as soon as it arrives.
• Send the usage request within 3 months of that issue date.
• Allow the tenant at least 21 days to make payment.
• Keep the bill and dated notice together for any later follow-up.

These deadlines apply to passing on a tenant’s water usage charges; they do not transfer the landlord’s water supply service charges to the tenant. A water authority’s bill may include charges beyond consumption, so separate the usage amount from other items before requesting payment. Clear records help establish which deadline applies and how the amount was calculated.

What are the NSW rules for charging tenants for water usage?

Section 39 of the Residential Tenancies Act 2010 sets out when a tenant may be liable for water usage charges in NSW. The lease must state the tenant’s obligation before they sign. A landlord can charge only for water the tenant uses, and the amount cannot exceed what the landlord must pay for that use.

Eligibility depends on the property’s metering and billing arrangement. A separate meter must measure water supplied to the tenant’s premises, and the water supplier must issue a separate bill. A shared meter or the landlord’s estimate alone does not establish the tenant’s individual consumption. Keep the bill and supporting usage records together when preparing a charge.

Separate water usage from other items on the bill. The landlord remains responsible for water supply service charges, excluding water usage charges, and sewerage supply service charges, excluding pump-out septic service charges. Water usage charges should also be kept separate from rent. This makes the amount requested clear and prevents fixed service costs being presented as tenant consumption.

A rebate affects the amount that should ultimately fall to the tenant. If the landlord receives a rebate for water usage charges, they must pass its benefit to the tenant or provide an equivalent amount. Apply the rebate to the relevant usage charge rather than retaining it while seeking the unreduced amount.

Water efficiency is another condition landlords need to consider before passing on usage charges. Required measures include compliant taps, showerheads and toilets, as well as leak checks. Keep evidence of inspections, repairs and upgrades with the property records. A meter reading can show consumption, but it does not prove that the property meets the separate efficiency requirements.

A hidden leak can lead to an unusually high bill even if the tenant’s ordinary water use has not changed. If a licensed plumber or qualified technician finds and repairs a hidden leak after the bill is paid, the property owner can apply for a hidden leak allowance. Keep the repair documentation and bill when assessing whether this process applies.

If a tenant disputes a water usage charge, they should continue paying the usage amount while the dispute remains unresolved. This helps avoid a termination notice for non-payment of rent or charges. Keep the disputed bill, calculation and correspondence together so the matter can be reviewed against the tenancy agreement and usage evidence.

Social housing has a distinct charging basis: tenants pay water usage as determined by ministerial guidelines issued by the Department of Communities and Justice. For other NSW tenancies, landlords should check the agreement, metering, bill, efficiency measures and any applicable rebate before requesting payment. These records show how the charge was calculated and which rule applies.

What water efficiency standards must a rental property meet before a landlord can pass on water usage charges in NSW?

NSW landlords must meet prescribed water-efficiency measures before passing water usage charges to tenants. The requirements cover toilets, taps, showerheads and leaks. Clause 10 of the Residential Tenancies Regulation 2019 (NSW) prescribes these measures, so check each item against the property rather than relying on a general claim that it is water efficient.

From 23 March 2025, NSW rental properties must have dual-flush toilets with a minimum 3-star WELS rating to meet water-efficiency measures. Check that each toilet has a dual-flush function and the required rating. A toilet that fails either condition may leave the property short of the applicable standard for passing on usage charges.

Showerheads, kitchen-sink taps and bathroom hand-basin taps must have a maximum flow rate of 9 litres a minute. According to the Australian Government Water Efficiency Labelling and Standards (WELS) Scheme, NSW water taps and showerheads with a maximum flow rate of 9 litres per minute have a 3-star water-efficiency rating. Internal cold-water taps and single mixer taps for kitchen sinks or bathroom hand basins must also meet the maximum flow rate of 9 litres per minute.

Since 23 March 2020, landlords have been required to inspect all taps and toilets for leaks at the beginning of each new tenancy. Check the property at the start of every residential tenancy agreement, and whenever water-efficiency measures are installed, repaired or upgraded. Fix leaking taps or toilets at those points, then retain records of inspections and repairs.

A practical inspection should cover every relevant fitting, not just the main bathroom. Test each toilet’s flush options, inspect taps and showerheads, and look for visible leaks. If a fitting is repaired or replaced during a tenancy, record the work and recheck the affected measure. This helps show which measures were assessed and when.

Keep a simple compliance record with the tenancy documents. It can note the date, fittings inspected, leaks found, repairs completed and upgrades made. Keep invoices or plumber’s notes with the record where available. These documents distinguish water-efficiency checks from meter readings and billing evidence, which serve different purposes.

Don’t treat a compliant meter or a tenant’s recorded usage as proof that efficiency measures have been met. Each requirement is separate: the property must meet the applicable fixture standards and be checked for leaks at the specified tenancy points. A missed inspection or unrepaired leak can affect whether usage charges may be passed on.

For help organising rental administration alongside landlord compliance tasks, explore property management in Blacktown.

RealHelp Real Estate: Residential Property Management

RealHelp Real Estate provides residential property management for landlords seeking support with the ongoing administration of a rental property. This can help coordinate water bills, meter records, tenancy deadlines and water-efficiency checks alongside rent collection and tenant communication.

For instance, a landlord moving from self-management may want help keeping billing documents and tenancy records organised. The management service can be discussed in light of the property and the support required. Water-charge decisions must still follow NSW tenancy requirements, including tenant eligibility and applicable notice deadlines.

If you’d like support managing a NSW rental property, contact RealHelp Real Estate to discuss your needs.

Build a consistent process for your rental property

Water usage billing compliance for landlords in NSW is easier to manage as part of a consistent tenancy-record process. Use these water usage billing compliance guidelines for landlords in NSW to review how bills, inspection records and tenant communications fit together. Organised records make it easier to trace decisions to the relevant property and tenancy.

If you’re considering professional support with rental property management, RealHelp Real Estate can discuss an approach suited to your needs. Applying water usage billing compliance guidelines for landlords in NSW can be a useful starting point for discussing your property’s ongoing administration.

Discuss property management with RealHelp Real Estate and take a practical next step towards a more organised landlord process.

Frequently Asked Questions

What about water used in common areas?

Water used in shared spaces, such as a communal garden or laundry, should not automatically be counted as an individual tenant’s consumption. A building-wide meter, for example, may record water used by several households and shared facilities. Dividing the bill between tenants by percentage does not establish what each person used. Keep common-area consumption distinct from individual usage when reviewing a charge.

What’s changed?

Since 23 March 2020, a tenant can be charged only when a separate meter measures supply to their premises and the water supplier issues a separate bill. Before that date, the legislation required separate metering but didn’t define the term. From 23 March 2025, water-efficiency standards also include dual-flush toilets with a minimum 3-star WELS rating.

Who pays for water?

The landlord receives and pays the water authority’s bill. A tenant may be asked to reimburse eligible water usage, but not the landlord’s other service charges. If a bill combines consumption with fixed supply costs, for example, separate those items before requesting payment. This keeps the tenant’s contribution tied to water use rather than the full cost of supplying the property.

Will anything change for tenants in properties with separate water meters?

According to Home in Place, tenants in separately metered properties with a separate water authority bill continue to be invoiced for their usage as before. The practical point is to compare the bill period with the tenancy dates. If a bill covers a period before the tenant moved in, they should not be treated as responsible for that earlier consumption.

Which water usage charges can NSW landlords pass on to tenants, and which charges must landlords pay?

A landlord may pass on the tenant’s eligible water usage, but must pay water supply service charges and sewerage supply service charges. The stated exception is pump-out septic service charges, which are not included in the landlord’s sewerage service-charge responsibility. If a bill contains several items, separate consumption from service charges before calculating what relates to the tenant.

How must a rental property be separately metered for tenants to be charged for water usage in NSW?

A separate meter must measure water supplied to the tenant’s premises, and the water supplier must issue a separate bill for that supply. A sub-meter reading or the landlord’s percentage allocation does not, by itself, meet both requirements. For example, a meter serving several units and their shared garden does not show one tenant’s individual usage unless the supplier bills that premises separately.

How often must landlords provide water bills and evidence of usage charges to tenants in NSW?

Provide the relevant water supplier’s bill whenever requesting payment for usage, rather than relying on an unexplained figure in a message or rent statement. Keep the bill with the tenant’s notice and calculation so the requested amount can be matched to its billing period. If another bill leads to a further request, provide the supporting bill for that charge too.

What is the deadline for NSW tenants to pay a water usage bill passed on by a landlord?

A tenant must be given at least 21 days to pay after the landlord requests payment. The tenant’s payment period is separate from the landlord’s deadline for making the request. For example, a request sent close to the end of the landlord’s three-month window still needs to allow the tenant the full minimum payment period. Record the request date and due date clearly.

Article by

Sayed Ahmad

Sayed Ahmad is the Founder and Principal of RealHelp Real Estate, a Blacktown-based real estate agency specialising in property management, residential sales and property appraisals across Blacktown and Western Sydney. With a strong focus on landlords, property investors, homeowners and sellers, Sayed combines local market knowledge, professional property marketing and personalised service to help clients make informed property decisions. His expertise covers rental property management, investment properties, leasing, tenant management, property appraisals and residential property sales across Western Sydney, North West Sydney and South West Sydney.