We are a small Non-profit water company. Can we legally raise water fees for some whose homes are used for vacation rentals and not everyone else?

Homeowners are charged a flat rate per quarter. The board of directors wants to
charge more per quarter for homes used as vacation rentals. Would that be legal?

Asked on December 11, 2017 under Business Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

You can't, or rather shouldn't, specifically raise rates on homes allegedly used as vacation rentals: doing so could raise some discrimination issues, if vacation rentals tend to be owned or used by a different demographic then full-time residence homes, and also proof issues if challenged (how do you prove it was a vacation rental, as opposed to a homeowner having family or friends staying over or housesitting?). But you you should be able to safely increase the rates based on objective criteria which may be associated with vacation rentals. For example: say that vacation rentals tend to have higher peak usage of water--you could have higher rates on water usage past certain defined threshholds. Or you could have higher rates during certain peak periods when people tend to rent vacation homes. Etc.

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