When it comes to water bills for landlords and tenants in Victoria, the answer depends on whether you are talking about water usage charges or the fixed water service charge — and the rules are set out clearly under the Residential Tenancies Act 1997 (Vic). In short, tenants pay for water they actually use, while landlords cover the fixed supply charges, provided the property meets specific requirements.

Getting this wrong can lead to disputes, VCAT applications, and strained tenancy relationships. This guide breaks down exactly who pays what, what conditions must be met, and how landlords can manage the process smoothly.

What Are the Victorian Rules on Who Pays Water Usage Charges?

Under Victorian tenancy law, a landlord can only pass on water consumption charges to a tenant if three specific conditions are all met. According to Consumer Affairs Victoria, all of the following must apply:

1. The property must be individually metered (or water is delivered by vehicle, such as a water tank filled by a supplier).
2. The property must be water efficient — meaning it meets the water efficiency standards prescribed under the Residential Tenancies Regulations 2021.
3. The tenancy agreement must expressly state that the tenant is responsible for water usage charges.

If even one of these three conditions is not satisfied, the landlord must absorb the full cost of water, including usage. This is a firm rule with no exceptions under current Victorian law.

What Does “Water Efficient” Actually Mean?

The water efficiency requirement is one landlords frequently overlook. To meet the standard, the property must have:

• All internal cold water taps and showerheads rated at 3 stars or above under the Water Efficiency Labelling and Standards (WELS) scheme.
• A single-flush toilet rated at 4 stars WELS, or a dual-flush toilet with a full flush of no more than 6.5 litres and a half flush of no more than 3.5 litres.
• All tap washers in good repair, with no dripping taps or running toilets.

According to the Victorian Government’s official guidance, landlords are responsible for ensuring these standards are maintained throughout the tenancy. If a tap begins to drip mid-tenancy and the landlord fails to repair it promptly, their ability to charge the tenant for water consumption may be jeopardised.

Who Pays the Fixed Water Service Charge in Victoria?

The fixed water service charge (sometimes called the “supply charge” or “availability charge”) is always the landlord’s responsibility. This charge covers the cost of connecting the property to the water supply network and is billed regardless of how much water is actually used.

In Melbourne, South East Water, City West Water, and Yarra Valley Water all issue bills that separate usage from the fixed supply charge. According to 2024 data from the Essential Services Commission Victoria, the average annual fixed water supply charge across metropolitan Melbourne sits at approximately $280 to $310 per year, depending on the water retailer. This cost falls entirely on the landlord, full stop.

Landlords who try to pass the service charge on to tenants through the lease agreement are doing so unlawfully. Any such clause in a tenancy agreement is unenforceable under the Residential Tenancies Act 1997.

What About Sewerage and Drainage Charges?

Sewerage and drainage charges are treated in the same way as the fixed water service charge. These are fixed charges that appear on most water utility bills and must be paid by the landlord. Tenants cannot be asked to pay sewerage or stormwater drainage fees.

How Should Landlords Bill Tenants for Water Usage in Victoria?

Assuming all three conditions above are met, here is the correct process for passing on water usage costs to a tenant:

1. Receive the water bill from your water retailer. The bill will show fixed charges and usage charges separately.
2. Separate the usage component from any fixed charges. Only the usage amount may be passed to the tenant.
3. Issue the tenant a copy of the relevant portion of the bill within 30 days of receiving it from the water company. Consumer Affairs Victoria confirms that landlords who fail to provide the bill within 30 days cannot charge the tenant for that billing period.
4. Give the tenant at least 30 days to pay the water usage amount after you have given them the bill.

Maintaining clear records of every water bill issued and every payment received is essential. A good digital system makes this far easier. Many self-managing landlords use a structured tenant portal for self-managed landlords to send bills, track payments, and keep a documented audit trail all in one place.

What Happens When There Is a Water Billing Dispute Between a Landlord and Tenant?

Water billing disputes are among the more common financial disagreements in Victorian tenancies. According to VCAT (Victorian Civil and Administrative Tribunal) annual reports, tenancy-related disputes including utility billing matters account for a significant portion of the tribunal’s residential tenancy caseload each year, with thousands of applications lodged annually.

Common flashpoints include:

• The landlord charging for water when the property does not meet water efficiency standards.
• The landlord failing to provide the water bill within the 30-day window.
• Disputes about whether a leak (and therefore high water usage) was the tenant’s fault or the result of a landlord’s failure to maintain fittings.
• Tenants disputing charges where the tenancy agreement did not clearly assign water costs.

If a dispute cannot be resolved directly between the parties, either side can apply to VCAT for a determination. Before it reaches that point, a structured approach to landlord and tenant dispute resolution can help both parties reach a fair outcome without the cost and stress of a tribunal hearing.

Tips for Landlords to Avoid Water Billing Disputes

• Conduct a water efficiency audit before each new tenancy and document the results in writing.
• Include a clear, compliant water billing clause in every tenancy agreement.
• Issue water usage bills promptly and keep copies of every notice sent.
• Respond to maintenance requests about leaks and dripping taps within the required timeframes.
• Use a reliable tenant communication platform so that all billing notices, maintenance requests, and responses are recorded in a single, searchable system.

Does the Type of Property Affect Who Pays for Water in Victoria?

Yes. The type of property and how it is metered has a direct bearing on who pays for water.

Individually Metered Houses

Most standalone houses in Victoria are individually metered, meaning the meter records usage only for that property. If the water efficiency conditions are met and the lease says so, the tenant pays usage charges.

Apartments and Units on a Shared Meter

Where a block of apartments or units shares a single water meter, individual usage cannot be attributed to any one tenant. In this case, the landlord must pay all water charges, including usage, because the individual metering condition cannot be satisfied. This is a common situation in older Melbourne apartment buildings.

Properties on Tank Water

Where a property’s water is supplied by a tank that is filled by a water carrier (rather than connected to a reticulated supply), usage can still be charged to a tenant, provided the lease states this and the other conditions are met. The landlord must still ensure the supply system is maintained and functional.

Rooming Houses

Rooming houses operate under a separate framework under the Residential Tenancies Act. Water charges in rooming houses are generally covered by the landlord as part of the overall rent arrangement.

What Should Landlords Include in the Lease Agreement About Water?

To lawfully charge tenants for water usage, the tenancy agreement must explicitly state this obligation. A vague or implied reference is not sufficient. The lease should clearly specify:

• That the tenant is responsible for water consumption charges.
• That the landlord will provide copies of water bills within 30 days of receipt.
• That the tenant has 30 days from receipt of the bill to make payment.

Well-drafted leases combined with thorough tenant selection processes form the bedrock of a successful rental investment. Landlords who follow tenant screening best practices for Australian landlords are better placed to enter into tenancies with responsible occupants who understand and meet their obligations, including utility payments.

Key Takeaways: Water Bills in Victorian Rentals

• Tenants pay water usage only if the property is individually metered, meets water efficiency standards, and the lease expressly says so.
• Landlords always pay the fixed water supply charge, sewerage charges, and drainage charges.
• Landlords must issue water usage bills to tenants within 30 days of receiving them.
• Tenants must be given at least 30 days to pay after receiving the bill.
• Properties on shared meters cannot pass water costs to tenants.
• Non-compliant attempts to charge tenants for water are unenforceable at VCAT.

Understanding the distinction between water usage and service charges is one of the most practical things a Victorian landlord can do to protect their investment and maintain a healthy tenancy relationship. Clear lease terms, well-maintained fixtures, prompt billing, and good communication all work together to keep water-related disputes to a minimum. Getting the fundamentals right from the outset saves significant time, money, and frustration down the track.