Summit County Wastewater Class Action Says Short-Term Renters Overbilled

Case Overview: A lawsuit challenges Summit County's wastewater fees for short-term rentals, alleging that property owners are unfairly overcharged based on maximum occupancy rather than actual usage.  

Court: Summit County Court (Colorado)

A new lawsuit filed in Summit County is raising questions about how wastewater fees are structured for short-term rental properties. On April 18, a homeowner and rental operator lodged a claim against the Upper Blue Sanitation District, arguing that service charges placed on certain properties are not justified by actual sewer usage.

The complaint seeks to certify a group of similarly impacted property owners, alleging that they have collectively paid “millions” more than what the law allows.

Short-Term Rental Owners Sue Over Wastewater Fee Calculation

Todd Ruelle, a Summit County resident who rents his single-family home for short stays, brought the complaint in county court. The suit disputes how the district calculates wastewater rates for homes operating as short-term rentals, Summit Daily reports.

Under Colorado state law, wastewater service providers must apply charges that are reasonable and correlate with usage. Attorneys for Ruelle claim that has not happened here.

“They shouldn’t get a break, but they also shouldn’t be carrying more than their fair share of the costs of the system,” said attorney Alex Dorotik, who is representing Ruelle in court.

According to the filing, Upper Blue Sanitation District began applying different rate structures to rented homes in 2019. While sewer charges for most single-family homes depend on averaged occupancy, those offered as vacation rentals are calculated based on their maximum allowed number of guests.

This means a typical three-bedroom home—normally assessed as if 3.5 people live there—could be assessed instead as accommodating up to 10 people, increasing fees by nearly 287%, the complaint states.

Lawsuit Claims Charges Based on Peak Occupancy, Not Actual Use

The core argument of the lawsuit rests on the use of peak occupancy figures over average use data. The plaintiffs say the district assumes that short-term rentals are continuously full, 365 days a year, with no regard for actual occupancy or usage.

“There is simply no evidence that (short-term rentals) are occupied with the maximum capacity 365 days out of the year,” the filing states. Plaintiffs contend that using theoretical occupancy translates into financial penalties not grounded in wastewater demands.

They point to daily flow figures as further evidence. Even on the busiest days observed in 2024, the system processed only 2.86 million gallons—about 43% of its total 6.68 million gallon capacity. Colorado regulations suggest planning for system expansion only becomes necessary when flows reach 80% of capacity.

How Do These Fees Affect Property Owners?

Short-term rental hosts in Breckenridge, Blue River, and surrounding areas within the Upper Blue Sanitation District may be subject to significantly higher charges under the revised calculation model.

The complaint claims that countless single-family homeowners simply by listing their properties for short stays have been made to pay charges that are not grounded in the actual cost of providing sanitation services.

If the case proceeds as a class proceeding, it could involve numerous property owners who have incurred these higher fees in recent years.

Ruelle, the lead plaintiff, is also president of another organization suing the Summit County government over unrelated regulations affecting rentals. In this suit, his legal team maintains that wastewater charges should align with dwellings’ actual impact on service infrastructure and not hypothetical usage limits.

Sanitation District Defends Fee Structure Based on System Capacity

In a technical memorandum published last year, the Upper Blue Sanitation District offered a defense of its current fee model. It asserts that sewer systems are constructed to meet peak demands. As such, rates that anticipate full occupancy are consistent with how facilities are designed and operated.

The memorandum states that “a short-term rental allows for an increased overnight housing population” compared to the home’s standard residential designation. Adjustments to wastewater billing, it argues, are meant to reflect peak daily loading — a higher potential strain on infrastructure even if not experienced every day.

Nevertheless, the lawsuit questions whether the district’s method meets legal requirements for proportionality and fairness. The plaintiffs say even the highest usage levels recorded fall far below thresholds requiring capital upgrades. As a result, they argue, higher charges for temporary-use homes remain unjustified.

Property Owners Seek Refunds and Fairer Billing Practices

The suit asks a Summit County judge to classify affected homeowners as a group, citing the difficulty and inefficiency of pursuing claims individually. If approved, other owners of short-term rental properties within the Upper Blue Sanitation District could join the civil case.

In total, the complaint seeks recovery of allegedly excess payments made under the current policy, along with legal fees and other associated costs. While district officials have not released detailed comments on the filing, the outcome of this legal dispute could impact how sewer services are billed in seasonal communities reliant on rental housing.

Do you own a short-term rental in Summit County? What are your thoughts on these wastewater fees? Share your experience below.