Magazine article Journal of Property Management

IREM International Members Discuss Utility Billing: The Process of Utility Billing Can Vary Greatly by Nation. Based on Their Experiences, Some of Our International IREM Members Shared Their Thoughts on Utility Billing in Their Respective Countries

Magazine article Journal of Property Management

IREM International Members Discuss Utility Billing: The Process of Utility Billing Can Vary Greatly by Nation. Based on Their Experiences, Some of Our International IREM Members Shared Their Thoughts on Utility Billing in Their Respective Countries

Article excerpt

SOUTH KOREA

Tenants pay the utility expenses separately from the rental fee in Korea. Commercial and residential properties use different billing systems. The main difference is how expenses are managed and how they are billed to individual units.

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A building gauge, floor gauges and individual gauges of electricity, gas and water are installed in all buildings. The cost is divided among the tenants after determining each tenant's use of space and utilities. The fee for common spaces is divided equally amongst tenants, based on the portion of the building they occupy.

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For most commercial buildings, the total utility bill includes electricity, gas and water, as well as common space expenses and unique individual expenses. Each tenant has only one bill for all utilities.

Just like commercial buildings, residential properties receive a bill from the management office of the building for total utilities, including common and individual expenses. However, residential units are also billed separately for individual gas consumption from the Korea Gas Corporation (KOGAS).

There is a recent trend in commercial property management to expand electricity equipment for safety reasons and to reduce gas consumption. For example, many commercial buildings have restaurants, coffee shops and hair salons, all of which use gas for cooking and heating. There is risk of smoke damage from the ventilator of a ground floor restaurant spreading to other units within the building. Although this is simply a facility problem, property managers of the building waste time issuing insurance claims because of smoke damage. Many owners and property managers recommend using electricity instead of gas to mitigate this risk.

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If there is no use of gas, the billing process is simplified. The facility management fee is reduced. The insurance amount is not necessarily affected, as electricity also poses other risks such as fire or electric shock.

Loretta (YouMin) Kim, CPM[R], director general of the Green City Institute, GreenCode Co., Ltd.

KAZAKHSTAN

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In Kazakhstan, the billing system has been changing drastically since early 2000. Before then, 90 percent of residential properties had no individual meters for hot and cold water consumption, and consumption was paid based on statistically calculated averages, usually per person. …

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