San Diego’s New Utility Fee Ordinance: What Property Owners Need to Know Before November 2025. Effective August 17, 2025, the City of San Diego will begin enforcing a new ordinance designed to “promote fairness, equity, and transparency” in how landlords bill residential tenants for utility services. While that sounds noble in theory, the practical impact for property owners and managers is another story — and one you’ll want to stay ahead of.
At FBS Property Management, we’re already preparing our systems and forms to keep our clients compliant while minimizing confusion for residents. Here’s what you need to know.
What the Ordinance Covers
This new regulation applies only to utilities provided directly by the City of San Diego — that means water, sewer, stormwater, and trash/recycling services.
Utilities such as SDG&E, internet, or third-party hauler fees are not part of this ordinance.
The key takeaway?
Landlords can still pass along utility costs to tenants, but only up to the exact amount paid to the City. No administrative fees, no mark-ups — complete transparency is now required.
Notice Requirements
Before any utility charges can be billed to a tenant, landlords must provide formal written notice explaining what’s being charged and how it’s calculated.
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New utility fees: Tenants must receive at least 30 days’ notice before billing begins.
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Existing fees: If utilities are already being billed, written notice must be served no later than November 14, 2025
This notice can be included in the lease or delivered separately by mail or in person, but it must contain specific language about the tenant’s rights to see documentation.
Transparency and Tenant Rights
The City is placing a strong emphasis on access and accountability.
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Tenants can request copies of the actual utility bills and the calculations used to determine their portion.
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Landlords must respond within 10 days of receiving the request.
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Any third-party billing fees must be separately itemized and backed up with receipts or invoices.
In short, property managers and owners will need to maintain clear, organized records — something we’ve always believed in and practiced at FBS.
Enforcement & Legal Risks
Tenants now have the right to take legal action if they believe they’ve been overcharged or not properly notified.
They can pursue injunctive relief, monetary damages, or even punitive damages.
The City also has the authority to enforce the ordinance administratively.
Translation: documentation is everything. A missing notice or incomplete calculation could open the door for disputes or penalties.
What This Means for Owners
While we fully support fairness and transparency, this ordinance adds another administrative layer to rental housing in San Diego — one that disproportionately impacts responsible owners already working within narrow margins.
Owners should expect:
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More paperwork and compliance tracking
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Potential billing delays while documentation is reviewed
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Resident confusion during the initial rollout period
FBS is already integrating the City’s required language into all new leases and preparing the mandatory addenda for existing tenancies. Our goal is to ensure full compliance while minimizing disruption for you and your residents.
Our Recommendation
If you self-manage or handle billing directly, begin preparing now:
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Review how you currently allocate water, sewer, and trash charges.
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Ensure you can document exact costs and provide copies to tenants.
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Plan to serve notices before October 31, 2025.
For our clients, FBS will handle this process seamlessly — serving the required notices, maintaining records, and staying ahead of any updates from the City.
Final Thoughts
San Diego’s new utility fee ordinance is well-intentioned but yet another example of how complex local regulations continue to shape property management. The best way to stay compliant (and sane) is to have a professional team managing the process for you.
At FBS, we pride ourselves on staying one step ahead of shifting legislation so you don’t have to. We’ll keep you updated every step of the way — and yes, we’ll make sure your notices go out on time.
