How do I split a utility bill between tenants?

The three methods that hold up

There is no legally mandated way to divide a shared utility bill. What matters is that the method is agreed in advance, written down, and applied consistently. A method invented after a large bill arrives is the one that ends up in front of a tribunal.

• Equal split — everyone pays the same share. Simplest to explain and hardest to argue with. Fair when rooms are similar and occupancy is similar.
• By room size — each tenant pays a percentage matching their share of the floor area. Defensible when one room is much larger, though it says nothing about who actually uses the heating.
• By occupants — a couple in one room pays twice a single tenant's share. Closest to actual usage for water and hot water, and the easiest to get wrong when somebody's partner moves in quietly.

Put it in writing before anybody moves in

The agreement should say which utilities are shared, the method, each tenant's percentage, and when payment is due relative to the bill arriving. A tenant who learns the arrangement when the first invoice appears has a reasonable complaint, and in most provinces an unwritten term is difficult to enforce.

Be specific about what is not shared. A tenant with their own meter, or a basement suite on a separate account, should not appear in the split at all — and saying so in advance prevents the argument.

Getting the arithmetic right

Percentages rarely divide cleanly. Three tenants at 33% each of a $100 bill comes to $99.99, and rounding each share up produces $100.02 — you have either lost a cent or invented one. Neither is a large sum, and both are the kind of thing a tenant notices and remembers.

The correct approach is to floor each share and hand out the remaining cents one at a time, largest share first, so the parts always add up to exactly the bill. Latchly does this automatically, and shows each tenant their percentage next to their amount.

If your percentages add up to less than 100, you are absorbing the rest — which is a perfectly reasonable choice, and should be a deliberate one. If they add up to more than 100, you are charging your tenants more than the bill cost, which is not.

Show your working

Send the bill with the split. A tenant who can see the total, the method and their percentage will usually just pay. A tenant handed a number with no explanation will ask where it came from, and they are right to.

Keep the bills. If a dispute reaches a tribunal, the question will be whether the amount charged matches what was actually spent, and the invoice is the only thing that answers it.