Apartment Accounting: Why Vacant Utilities are Separated

A question I often hear is why on the trailing 12 month income statement utility expenses are separated out between utilities for vacant units, common areas, and occupied units (often called house units).

Here's a screenshot of a T12 to show what I mean:

The reason for this is because by law, most cities don't allow the owner to charge tenants utility bills for the common areas or for vacant units. This means the common area and vacant unit utility expenses will be a full expense to the owner.

Note that some cities will take the entire utility bill and allow only a percentage of the total bill to be charged back to tenants. For example: the total utility bill is $1,000,000 for common areas, vacant units, and occupied units. 75% of this ($750,000) could legally be charged back to tenants. The remaining $250,000 would be paid by the owner.