We are now very confident that we understand how the new laws work. Leases that were in place before 31 Jan 2011 remain able to charge for water usage but will lose that right on 31 Jan 2012 if the water conservation mods have not been completed.
New leases signed after that date will only be able to start charging water usage once the mods have been done. The lease can be signed before the mods are done, and doesn't need to be modified when the mods are completed, but the tenant shouldn't be charged for water until the mods are done.
Obviously the tenant can seek a rebate for any water usage paid that were improperly charged.
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