At the Cielo, a 457-unit luxury building in NoMa, tenants say that mandatory utility bills skyrocketed this summer when their property manager, LCOR, began charging for “common area” fees.

A notice from LCOR’s third-party utility billing company, Conservice, says, “Cielo, your complex, contains several community spaces—also known as ‘common areas’—which accrue their own utility costs. And while the Cielo lease you signed assigns responsibility for covering common area utility charges to residents, LCOR has been covering those costs on your behalf for more than a year.”

Nic Rogers, who moved into the Cielo last August, says his utility charges tripled since LCOR added common area fees. “The gym has been 80 degrees for a month and somehow we’re still being charged for HVAC,” Rogers says. “It’s really shady because the fees were never spelled out. If they told me ahead of time, I could have made the choice to live somewhere else.”

A recent Conservice bill at the Cielo says that while Pepco provides electric service for the whole building, the submetering system measures the amount of electricity used by the HVAC system in individual units.

“You are billed according to that consumption multiplied by the average electric rate of the local utility provider,” the bill says. “You are charged $0.239995 per kWh.”

But Pepco’s residential rate is $0.1201 per kWh, and company spokesperson Adina Kauzlarich can’t explain the discrepancy in the two rates. Kauzlarich says she cannot speculate on how third-party billing companies calculate their bills. Doug Jentzsch, vice president of marketing at Conservice, did not explain how Conservice calculates the rate or why it’s higher than Pepco’s residential rate.

Tenants complained to the D.C. Office of the Attorney General about billing practices at the Cielo, and in an Aug. 24 letter, Conservice Senior Counsel Brett Kraus writes in response that billing tenants for all “owner-paid spaces,” including the leasing office, is consistent with industry standard and D.C. regulations.

The new common-area charges were especially troubling for Nikki Peele, who lives in one of the 37 units reserved as affordable housing through the Department of Housing and Community Development’s inclusionary zoning program.

Tenants in the program, which requires new buildings with 10 or more units to set aside 8 to 10 percent of the units as affordable housing, are selected through a lottery. Peele was ecstatic to land at the Cielo.

But the addition of the new common-area fees has threatened to upend her stability and increased her monthly rent of $1,654 by about $165. DHCD’s initial notice informing Peele she was eligible for the unit only mentioned a $50 fee for common-area HVAC, not the multitude of unpredictable common-area fees for electricity, gas, water, and sewer that were tacked onto Peele’s rent.

“If I knew I would be charged these fees, I would not have moved into the building,” Peele says.
Multiple recent floods in the building have caused Peele to question whether those water costs are being passed on to the tenants. Krause writes in response to the OAG’s questions that the company has not adjusted tenants’ bills for the water leaks or other utility failures.

LCOR directed tenants to contact Conservice with questions, but Peele says Conservice told them to contact Cielo/LCOR. In an email to LCOR, Peele writes that Conservice has said that tenants are “not authorized to see the building’s utility bills or how they were calculated without Cielo/LCOR’s authorization.” 

A spokesperson for LCOR tells City Paper that “all billing was agreed to in the residents’ leases,” which are “consistent with DC law and industry standards.”

But those Cielo tenants are not alone in grappling with hidden or unpredictable mandatory utility fees. City Paper’s examination of utility billing practices across 20 buildings managed by Bozzuto Management, Brookfield Properties, Edgewood Property Management, Greystar, Kettler management, and LCOR reveals a pervasive pattern of charging tenants hidden or misleading utility fees using opaque and sometimes unlawful billing methods by third-party utility billing companies. With little opportunity to dispute the accuracy of these fees, the consequences can be devastating for tenants, especially for those on strict budgets. Some face eviction over just a few hundred dollars. 

A review of hundreds of eviction filings, consumer complaints, tenant leases, utility bills, and multiple lawsuits, along with interviews with more than 60 tenants, paints a troubling picture.

• Some landlords are not disclosing mandatory utility fees during the pre-lease stage, only to reveal the fees after tenants have invested time and money. In buildings managed by Greystar, Bozzuto, and LCOR, some tenants in inclusionary zoning units were charged utility fees that were not disclosed in their notices from DHCD, in violation of agency guidelines.
• Tenants are largely in the dark about the methods used to calculate mandatory utility fees. Ratio Utility Billing System, or RUBS, is a method that divides a building’s total utility bill and estimates a unit’s usage, but has been decried as opaque and unfair by tenants. Another billing method uses unregulated private submeters—devices installed and maintained by a landlord to measure utility consumption in an individual unit—and has left some tenants with exorbitant water bills.
• While private residential submeters for gas and electric are prohibited in D.C., some corporate landlords are unlawfully charging submetered fees for those utilities, according to legal filings and tenant accounts. Lawsuits against Greystar and Bozzuto allege that “tenants locked into leases have little choice but to cede” to the companies’ “illegal billing methods.” 
• Tenants have been stymied in their efforts to question or dispute the accuracy of their bills. Tenants who reach out to the utility billing companies are often directed to contact the property management company. The property management company typically then directs tenants back to the utility billing company. The process is described in lawsuits against Greystar and Bozzuto as “an ongoing merry-go-round of finger-pointing and misdirection.”
• Utility companies’ payment assistance programs, designed to keep people in their homes, are unavailable to tenants who are billed by third-party companies like Conservice because tenants are not direct customers of the utility companies. The Office of the People’s Counsel, an agency that advocates for District utilities consumers, has told tenants that the agency “does not have jurisdiction” over third-party billers and cannot provide assistance. In one case, OPC “advised [the] consumer to reach out to her church and/or family and friends for financial assistance towards her 3rd party water bill.”
• Tenants in affordable housing units are at heightened risk of displacement for the inability to pay third-party utility fees. Edgewood Management, for example, filed at least 43 eviction actions against tenants at the Grove for failure to pay water bills since 2022. Of those filings, 40 percent involve amounts of less than $600. 

Jentzsch says via email that “Conservice does not violate any regulations in DC including the ban on commercial submetering of electricity.” The utility billing company has faced lawsuits and complaints alleging unfair and opaque billing practices in other cities. Representatives for Bozzuto, Kettler, and Greystar property management companies did not respond to requests for comment.

Ward 6 Councilmember Charles Allen, who has been in contact with the Cielo tenants, tells City Paper that he will explore a legislative fix for hidden fees and welcomes input from other buildings.

“If the cost is up front you can at least make an informed decision, but charging common area fees is just passing on every possible penny to the tenants,” Allen says. “This is a hidden and predatory fee for everybody. But for working families and lower income residents, it hits them even harder.”

DHCD’s public information officer, Tim Wilson, says in an email that housing providers are not allowed to tack on additional fees for tenants in the inclusionary zoning program after the agency has selected recipients through the lottery. Wilson says that tenants should contact the inclusionary zoning compliance team at iz.adu@dc.gov to dispute the charges that were not listed in their lottery notices.

“Once a tenant has been selected, the lease must comply with the fees stated in the lottery announcement,” Wilson says.

After Peele complained to DHCD, LCOR reversed some of the common-area fees for the Cielo’s 37 tenants in the inclusionary zoning program. But she says that she is still being charged common-area water and sewer fees, which were not explicitly disclosed in her lottery notice. 

“Tenants need to do their due diligence because there seems to be a concerted effort to make fees less transparent,” Peele says. “It doesn’t matter if you’re in a luxury building or a low-income building. Everyone deserves transparency in their housing costs. You shouldn’t need a doctorate degree to figure out a utility bill.”

***

Corporate landlords are increasingly finding ways to offload utility costs onto tenants, which represent a significant operating expense for apartment buildings. According to property management software company Appfolio, billing tenants for utilities “is a powerful way to turn an expense into income.”

D.C. tenants, many of whom already spend a significant portion of their income on rent, have turned to the D.C. Office of the Tenant Advocate, which has seen a huge spike in complaints about utilities in the past year, according to legislative director Joel Cohn.

Brian Rohal, senior staff attorney for Legal Aid DC, has noticed a similar trend. “In the past year, Legal Aid has seen an increase in the number of eviction cases filed against tenants for failure to pay utility bills,” he says. In some cases, Rohal explains, tenants who may have not been aware that they were behind with their utility bills end up racking up thousands of dollars in fees.

“Tenants often don’t know how these bills are calculated, which can include multiple utility charges, and these charges add up,” he says. Tenants who are billed by third-party companies are unable to take advantage of utility assistance programs because many of those programs require that the utility account be in the tenant’s name.

Nacole Thrower did not anticipate facing housing instability when she was awarded a unit through the inclusionary zoning program at the Gantry, a 551-unit luxury building. “I thought it would be the perfect home for me and my son,” she says.

When she received a notification from DHCD that she was eligible for an available unit, the agency broke down the rent and fees: a $50 application fee, $1,098 a month for rent, and required monthly fees of $10 each for trash and renter’s insurance. Parking, which was an optional fee, cost an additional $250 per month. Thrower would be responsible for her electricity, water, and sewer, and the $500 amenity fee would be waived.

But right before she signed the lease, Thrower received a welcome letter that included a one-time $500 administrative fee that was not disclosed in any of her previous paperwork.

Worried that she might lose the unit, Thrower says, “I just paid whatever they told me to pay.”

Her welcome letter lists other fees that were not disclosed in the notification from DHCD, such as “electric usage for your heat and air conditioning,” which are billed by Conservice. But Thrower says she also has a separate bill from Pepco.

“Why am I still getting billed for electricity?” Thrower asks. “Every time, there’s this fee and that fee.” 

The utility addendum in her lease adds an administrative fee of $6 to $8. And a special provision at the end of the addendum says that Thrower is responsible for gas usage—another cost that was not disclosed elsewhere.

“When you have a child and move into a new place, you budget so you can clothe and feed your child,” Thrower says. But the proliferation of fees, adding almost $200 a month to her rent, made budgeting difficult. “There’s no telling how much your bill is going to be every month,” she adds. “People complain, and they don’t tell us how they come up with bills.”

Thrower, who is now facing eviction for an unpaid balance (which includes utility fees), has been charged approximately $2,500 in previously undisclosed mandatory fees over about a year and a half. “How is this affordable?” she asks. “When I make the bare minimum, and they’re charging all these fees?”

Thrower and her neighbors at the Gantry air their grievances in a 250-person group chat. And frustrated tenants throughout five luxury apartments in Navy Yard managed by Brookfield Properties have gone a step further in creating a website to document their complaints. The site accuses Brookfeld of using “vague and expansive” lease language that “creates an environment where tenants have no control or predictability over their expenses.” 

Other tenants in big luxury buildings are turning to the legal system for help. In a pair of uncertified class action lawsuits filed in D.C. Superior Court in December 2023, former tenants at Illume and Novel South Capitol allege that for years Greystar and Bozzuto have “systematically charged these tenants outright illegal utility surcharges to increase its profits above and beyond industry standard rents and the disclosed monthly rate for rent set in its form leases.” Tenants who do not pay these illegal charges face steep late fees and even eviction and are “captive customers” for the companies’ “abusive practices,” the lawsuits say.

The complaints allege that Greystar and Bozzuto engaged in “drip-pricing” schemes to “inflate tenants’ monthly rent through arbitrary and variable utility assessments.” The companies concealed the true amount of rent, which included mandatory utility fees, in their ads and only disclosed them for the first time in tenants’ leases after they had already invested hundreds of dollars in application fees, according to the lawsuits.

Then, when tenants move in, the complaints allege, Greystar and Bozzuto require “tenants to pay per unit rates for water and/or sewer service that exceed the lawful rates chargeable in multifamily residential properties.” The companies increase their profits by using “an illegal submetering or energy allocation methodology to illegally tabulate each tenant’s gas and/or electric Utility Rent, compounding tenants’ problems,” according to the lawsuits.

Unlike Pepco, which owns and maintains its own public submeters to measure utility usage in individual housing units, private submeters “pose a significant risk of harm to consumers because they are not regulated in the same manner nor meet the same standards,” the complaints allege. 

“By threatening housing security every month to extract more money from tenants, Greystar and Bozzuto’s utility rent schemes take profiteering to a new level,” says Kristen Simplicio, a partner at Tycko & Zavareei who is representing tenants in the lawsuit against Greystar and Bozzuto. “We are committed to fighting for the rights of tenants and ensuring that they are not exploited by these unscrupulous property management companies.”

Neither Greystar, nor Bozzuto responded to requests for comment regarding their utility billing practices.

***

Rohal, the Legal Aid attorney, notes that housing subsidies that low-income tenants rely on often do not cover utilities.

Tenants at the 186-unit the Grove at Parkside, a building designated as affordable housing, describe a culture of fear stemming from mandatory fees assessed by Edgewood Property Management (which recently rebranded as Pratum Companies). Eviction filings are routinely plastered on tenants’ doors, neighbors disappear in the night, and their belongings are dumped in the trash.

And while eviction filings are a matter of routine, repairs are hard to come by, according to tenants.

“You put in a work order and no one comes,” says Patricia Wright, who moved into the building in 2017. “The ceiling is always cracking, but they just scrape and paint it instead of dealing with the water leaking upstairs,” she adds.

Edgewood filed to evict Wright over $5,293 in unpaid water bill charges that she says were not disclosed in her original lease. Mundane costs are also passed on to tenants at the Grove.

“They charged me $6 to change a lightbulb,” Wright says, adding that it’s hard to feel peace of mind when “every time you come home, there’s another bill under your door.”

Edgewood also filed to evict Kayla Briscoe over $130 in unpaid water fees. “I was young and struggling, but it was my first home, and I was excited,” Briscoe says of moving into the Grove in 2017.

Her original lease, which she shared with City Paper, says Briscoe was responsible for her water usage; but she was surprised when she began receiving bills from Studebaker Submetering, the third-party utility billing company, directing her to make payments to Edgewood. “I never knew I would have to pay Edgewood. I thought it would be like the Pepco bill,” which is paid directly to the electric company, Briscoe explains.

Briscoe’s Studebaker bill shows that she was charged a rate of .02340 per gallon. But DC Water cannot definitively say whether that rate is excessive. In an email, a spokesperson says that DC Water has no role in what third-party utility billing companies charge and that “unless the billing is an exact mirror of our fees, it’s really difficult to do any comparisons.”

Ringo Lanzetti, managing partner of Studebaker Submetering, did not respond to questions about their billing rate or the accuracy of their meter readings.

Briscoe began to demand answers from Edgewood in fall of 2022, when her water bill doubled in less than a year. At first, she thought her running toilet was responsible.

“My toilet was running for two years, and they wouldn’t fix it,” she says. “The resident manager told me it was because of me and that a running toilet wouldn’t increase the bill.”

But even after a relative fixed her running toilet, Briscoe’s water bill remained high—at an oddly consistent $74 for the next six months—as she continued to question how her bill was calculated to no avail. Briscoe says Edgewood’s eviction case against her was dismissed on May 1, but the company filed two more cases against her in the following month. “I just hate it here now,” Briscoe says.

Despite Edgewood’s aggressive collection of tenants’ water payments, the owner of the Grove at Parkside, CI GD Parkside 7 LLC, owed DC Water $122,453 as of December 2023, according to a tax lien filed by the utility.

Richard Gilbane, chairman and founder of Gilbane Development Company, which is listed as one of the beneficial owners of CI GD Parkside 7 LLC, says that water bills at the Grove are calculated based on documented water usage from a unit’s water submeter monthly report and multiplied by the applicable DC Water rate.

If a submeter is not working, Gilbane says via email, tenants will be billed on their estimated historical usage. He adds that historical use could include “many instances in which there are no issues with the plumbing fixtures and it is simply the tenant excessively using water (tenants using their in-unit washing machine for a laundry side business, constantly flushing cigarettes down the toilet, showers left running for hours, etc.). In both instances, the estimated water usage billing practice is to the exclusive benefit of the tenant.”

He says that tenants’ leases have always included a utilities addendum that spells out tenants’ obligations for utility usage. He says “in no instance has there been a lease executed at the Property that didn’t include the Utility Addendum,” a copy of which Gilbane shared with City Paper. The document does not disclose the use of a third-party billing company or the methods used to charge tenants for water and sewer. Gilbane says the DC Water tax lien, which has been paid off and is in the process of being removed, was a result of a billing address error.

Wendy Simpson, senior vice president of marketing and customer experience at Pratum Companies (formerly Edgewood), says the company no longer manages the Grove at Parkside as of March 2024.

But Edgewood Management has filed almost 40 eviction cases against tenants at the Grove since March 2024; 32 of those cases are still open. Mark Raddatz, the attorney who filed the evictions, did not respond to questions about these filings.

Tenants at the Grove interviewed for this article say they have never seen a utility addendum to their leases. Wright is still trying to get a copy of her original lease in her eviction case. A filing from July, seeking sanctions, indicates that Raddatz has failed to produce any documents to Wright for more than six months.

Edgewood was previously involved in a water billing controversy at a building in Ward 7. In 2019, the Office of Attorney General sued Park 7 Residential, L.P. The OAG alleged that the owners of Park 7 billed tenants for water that they never agreed to pay and shifted the costs of water to tenants via deceptive lease renewals. Park 7 Residential, L.P., agreed to pay at least $450,000 in refunds to more than 470 current and former tenants, in addition to another $200,000 to the District for investigation costs. Park 7’s owners also agreed to submit water billing reports for the next two years.

Chris Donatelli, beneficial owner of Park 7 Residential, L.P., told WUSA9 that the whole thing was a “good faith” mistake “by our prior management company (Edgewood) regarding the water bills.”

And as of December 2023, Edgewood was continuing to charge tenants with previously undisclosed utility fees. That month, the company sent notice to tenants at the 107-unit Big Sky Flats, alerting them that they would be charged for water consumption through a third-party billing company called Minol.

Simpson, VP of marketing at Pratum, did not respond to questions about utility fees at Big Sky Flats.

***

Tenants in buildings managed by Kettler Management say they were at times charged exorbitant fees in a single bill for months’ worth of usage, despite the company’s failure to repair water leaks and running toilets.

Kettler started managing the Jamison at Dakota Crossing apartments in spring of 2022. In March 2023, the tenants, many of whom pay their rent with government housing subsidies, received bills of nearly $1,500 for nine months’ worth of charges.

“Everyone was complaining about how high the water bill was,” tenant LaShawn Melton says. “Kettler told us that it was higher because the number of tenants in the building went up.”

But Melton’s lease, which she shared with City Paper, says that her water bill would be determined by submetering her actual water use, so she was confused about how the number of tenants in the building could determine how much she paid for water.

The excessive bill motivated Melton to move out in 2023. “Kettler would not give me my rent history until I paid off that water bill,” she says. “I had to apply to [the Emergency Rental Assistance Program] so I could pay off the balance and leave.” 

Melton considers herself lucky. “I was able to leave, but there are elderly and disabled tenants there who can’t advocate for themselves,” she adds. 

Complaints about Conservice and Studebaker filed with the Office of the People’s Counsel, an agency that advocates for District utilities consumers, provide a window into the frustrating plight of tenants, some of whom are seniors, veterans, and voucher holders. 

In one case, OPC notes that the complainant “might have a serious problem with his landlord. The bills seem extremely high for an individual user ($13k?). I sent him a referral to [Office of Tenant Advocate] to see if there is something that can be done to avoid eviction.” 

OPC advised a disabled tenant with a $631 water bill from Studebaker to “look into contacting [the D.C. Housing Authority] to report what could be unfair and inflated water usage charges.”

Another case note says that the consumer “has had extreme difficulty in dealing with her building’s third-party supplier. She is $4,000 behind on her water service and other voucher holders in her building agree that her billing is out of control.”

In most of the 50 complaints reviewed by City Paper, OPC determined that it “does not have jurisdiction over Property Management and tenant third-party billing disputes.”

***

At the Cielo, tenants remain distrustful and skeptical of the accuracy of their utility bills, which were as high as $400 this month. “After six months of non-stop inquiry by residents about the common area utility bills, there is no more clarity today than when the first Conservice bill arrived,” says Peele, who has posted about the issues on social media. 

“Ignore the glossy brochures, hip websites, chic lobbies, and luxury amenities,” Peele adds. “And if you are not careful, you can find yourself trapped in a cleverly designed cage with a … convoluted lease you can’t afford nor escape.”

Wright, for her part, says that after years living at the Grove at Parkside, “I just want a brand new start.” She is hopeful now that she may have found a new subsidized apartment. “The building is nice, but I made sure to ask management if they were part of Edgewood first,” she says, after her experience with the company’s hidden fees. Of her new property management company, she says: “I’ve never heard of them, but their name is Bozzuto.”