How do I deal w/ city shutting of my water for prev owners bill?

14 Replies

I bought my first house July 1st, and at the time everything looked settled up and I appeared to have it free and clear. While switching the water/sewer to my name I learned they have a 3 month delay on the billing so the past due bill the previous owner paid at closing wasn't the last one. Yesterday I was reminded of that fact when the city (Norwood, OH) placed a notice on my door stating my water is to be shut-off "as soon as one day". At no point were any bills sent to the house with my name on them (as they were still under the previous owner & tenants names), so I didn't know of this all until this past Friday when the neighbor mentioned it. When I called the city then, they claimed the owner thought they had put money in escrow for it (which they hadn't) and if they hadn't then it falls to me.

So I'm curious what my rights are in this case?

Do I have a leg to stand on in arguing the bill should be forward on to the previous owner?

How have you dealt with similar situations, or how would you approach one like this?

I imagine that I might be learning a lesson and having to just pay it so it doesn't rack up more fees & inconvenience, but I'd love to find a way to resolve this without having my bank account take the hit or lose too much time over this. Thank you in advance for any advice!

Brendan:

The City will be the most difficult party to deal with.  To avoid getting in the middle, they just assume the property owes the bill, attach a lien or turn off the water, and let others fight over who owes.

Your best bet might be to talk to your title company or closing attorney.  If they have not received a final water bill from the city, they often withhold a small amount of funds to the seller as escrow for the water bill.  Given that you closed July 1, however, I suspect any funds that may have been disbursed already.

Your last hope is to go after the seller. Unless the water bill is huge, an expensive legal fight doesn't make sense. Maybe a nice note from you or a stern note from an attorney will shake loose the funds.

Promotion
PPR Note Company
Note Investing
Diversify your portfolio and get completely passive cashflow.
All without tenants, repairs, or vacancies - in a real-estate-backed investment fund.
Here's how.

In most areas, water bill is considered to run with the property. In that regard, you are responsible at the end of the day. That being said, if your purchase contract was written correctly, the seller is responsible for prorated costs. You can ask him for that money back or sue if necessary (and worth it).

I didn't realize that the bills ran with the property, but that's good to know. After talking with the city yesterday I found I have a week before they act on so I have some time to try and get the seller to pay it, although it's likely that it will fall to me. I also learned this wasn’t the first time the seller’s agent has done this (leaving the final bill for the new owner) and my chances of success are minimal.

I don’t think $421 is worth suing over in this case, even if it hurts. A nice note to the seller seems to be my best course of action. Thank you for the advice! I really appreciate it.

We got the same $274 outstanding even though the sellers attorney documented it being paid. So we sent it back to our attorney who ALWAYS holds back $250 in escrow for this same reason, you obviously needed a lot more but you paid your attorney to discover any & all arrears. Our seller eventually made up the difference. In your case I would pay it to avoid shutoff/turn-on fees (ours is $1200) then have your 'competent' closing attorney send it back for reimbursement.

@Brendan Wood

The city does not need to file a lien for the water or some other services owed.  The title search will not reveal any of these city items.  When I buy a property as part of my due diligence I submit a FOIA (Freedom of Information Act) request.  It’s free and provides as much Information as you request.  This way there are no surprises.  I ask for the following every time. The request can vary depending on the property.

Are there any code violations on the property?

Are then any outstanding water bills owed to city?

Are there any liens, judgements, fines or other payments owed to city?

Provide a copy of the water billing for the past 12 months?

Are there any zoning violations on the property?

A history of all permits and inspections issued and conducted by the city?

Are there any open permits?

A copy of the plat of survey for the property?

This Information can save you time and headaches and should always be part of your due diligence. 

Originally posted by @Kenneth Garrett :

@Brendan Wood

The city does not need to file a lien for the water or some other services owed.  The title search will not reveal any of these city items.  When I buy a property as part of my due diligence I submit a FOIA (Freedom of Information Act) request.  It’s free and provides as much Information as you request.  This way there are no surprises.  I ask for the following every time. The request can vary depending on the property.

Are there any code violations on the property?

Are then any outstanding water bills owed to city?

Are there any liens, judgements, fines or other payments owed to city?

Provide a copy of the water billing for the past 12 months?

Are there any zoning violations on the property?

A history of all permits and inspections issued and conducted by the city?

Are there any open permits?

A copy of the plat of survey for the property?

This Information can save you time and headaches and should always be part of your due diligence. 

Don't FOIA requests in general take a very long time to obtain? That wouldn't be very useful in a closing where you don't have much time.

@Andrew B. That isn’t true, it’s highly dependent on the local areas laws and regulations. Some places it runs with the property and in other places it doesn’t

@Mindy Jensen

The FOIA request takes up to 7 days.  It depends on the city or county if you need to send to multiple departments.  Most cities have a FOIA officer or multiple officers.  The form is generally available on the cities website.  I did have a county where I needed to send in three different requests.  If your due diligence runs short, I ask for an extension.  I have never been denied an extension.   Transparency is the latest government buzz word.  They are subject to fines if they don’t respond in time.  There is only a cost when you ask for copies and it exceeds 50.  I have them emailed to me.  As far as timing, I have done bank purchases in 30 days and the FOIA was not a delay.

Promotion
Apartments.com
List, Screen, Lease, Get Paid, Manage.
No Better Place to Lease Your Place
Owners rely on the #1 rental site to get the best results from their rental properties.
Get Started Now

Not ever city is the same, but I had to take proof that the property was purchased and the old owner was no longer in the picture before. I’ve had to do this on more than one property. Chances are this could be all you need to do. 

Originally posted by @Account Closed :

Not ever city is the same, but I had to take proof that the property was purchased and the old owner was no longer in the picture before. I’ve had to do this on more than one property. Chances are this could be all you need to do. 

I talked with the city the day I bought it and, in retrospect, knew this could be an issue at that point. They said there would be a final bill sent to the previous owners (2-3 months after closing), and if they didn't pay then it would fall to me. I didn't truly connect the dots until I got the notice. Some lessons aren't fun to learn, but there is no other way when you try something new (and are too stubborn to ask for help before things are on fire).

I'm glad to hear it worked out well for you, even if it took some effort.