RUBS stands for ratio utility billing system. Strictly, it means you take the building's actual master-meter bill and allocate it to units by a formula, usually square footage or occupant count, and bill each tenant their share as a separate line. It is not the same as raising rent by $90 and paying the bill yourself, even though people use the term loosely for both. Whether you may bill tenants for water at all, what disclosures the lease needs, and whether a formula or only a real submeter reading is allowed varies by state and sometimes by city, and a few places prohibit passing master-metered water through entirely. That's a question for a local attorney or your city's utility, and get the answer before you write it into a lease.
Submetering means installing a real meter on each unit's line and billing actual usage. On a duplex, expect roughly $1,200 to $2,500 per unit depending on how the plumbing is run, plus a permit. If the two units branch off a single trunk in an awkward spot, it gets worse fast.
Your agent's version does work at two units, and it's simpler. The cost is that you eat overuse. A tenant who waters a lawn or ignores a running toilet spends your money, and you can't tell which side it's happening on.
On the appraisal, the 1025 rent schedule notes which utilities the owner pays, and the appraiser adjusts comps for it. Handling it either way is normal. What matters more for your file is that whatever you do shows up consistently in the lease, the rent roll, and the expense statement, because a lender comparing those three documents notices when water appears in two of them and not the third.
