Who is responsible for outstanding water and sewer bill?

12 Replies

I purchased my first rental property at the end of December.  It was a foreclosure and I purchased it from the bank with cash.  At the closing I received a credit for the sanitation bill.  Now 2 months later I receive a water and sewer bill that starts back in October.  How did this happen?  I had a realtor, lawyer and a title company.  What should I do? 

Originally posted by @Laura Sullivan :

I purchased my first rental property at the end of December.  It was a foreclosure and I purchased it from the bank with cash.  At the closing I received a credit for the sanitation bill.  Now 2 months later I receive a water and sewer bill that starts back in October.  How did this happen?  I had a realtor, lawyer and a title company.  What should I do? 

 send the bill to your lawyer and ask him to review it with the title company.  Could be the payoff got lost in the mail, could be that it was never sent.

This happened to me and my title insurance covered it 

Thank you for pointing me in the right direction!  

I have had this happen on 2 properties now. The water company claims they will try to get payment from the previous owner for a few months but then later they just end up sticking it to the current owner. These are government owned/run utility companies, not private companies. I have even had to pay a water bill from 2009 even though the property had changed hands 3-4 times since then and the water company never figured it out until now.

Sucks totally but I wanted to sell the house and the buyer knew about it so I had no choice but to bite the bullet. Was only a couple hundred dollars and I was making $20k+ so it was a drop in the bucket.

Since then going forward I always check for unpaid utilities before buying something, title companies here won’t check those automatically unless they are asked specifically. They said they would need SS# for all previous owners, etc.

If you received a credit then presumably you were paid the money necessary to pay the seller's prorated portion of the current bill.  Title company probably called and got the current water balance but the bill had not been generated as of closing.

I agree you should review the numbers to confirm but I don't see what the problem is.

Thank you for responding.  The credit we received was only to cover the outstanding sanitation bill.  This was the only bill addressed at closing.

 My inquiry is based on the water and sewer bill we received for a time period where the bank owned the home, prior to us closing on it that was billed to us from the city after we closed.

Ah so sanitation bill vs. water/sewer. Sorry, didn't catch that distinction.

Unfortunately your bank seller is not going to be responsive to payment demands after the fact so you'll likely need to find another pocket.

It's common for foreclosures to have water cut off for months before the sale so first is this a large bill or small bill you are facing?

It’s not a terribly huge bill as the home was winterized but there is still a service fee and sewer is a standard charge.  

Being my first experience buying a foreclosure I want to learn from this experience and be smarter walking into the next one!  I’m disappointed in myself for not thinking of water and sewer charges knowing that santitation was brought up.  I’m just wondering if this should have been caught by anyone (other than myself)...attorney, realtor, title company?  I did pay them all to represent my best interest in the transaction and in retrospect I was thinking that water and sewer are common charges that are billed to the property as opposed to a person so did someone drop the ball?  

I’m not necessarily looking to place blame.  I’m really trying to figure out for my next purchase should I use the same realtor, attorney, and title company.

Thank you again for engaging in this dialogue with me.  I have found the information on this website to be invaluable.

@Laura Sullivan Unpaid water/sewer is a lien in every jurisdiction we cover and likely in yours so this issue really should have been raised prior to settlement... and if a balance was owed it should have been addressed. But before reaching to everyone involved I would make sure the charges actually relate to a third party's usage rather than your connection, account establishment fees, etc.

Yes, I’m definitely making phone calls in the morning!  The bill specifically lists a date range of usage that is prior to the closing.  

This happened to me also. My title company stated that they do not automatically check for outstanding water bills from prior owners unless specifically asked to. I now instruct them to ask, after biting the bullet & getting burnt!

Originally posted by @Laura Sullivan :

Yes, I’m definitely making phone calls in the morning!  The bill specifically lists a date range of usage that is prior to the closing.  

If the property was vacant the water wasn't being used. I find it odd the title company would get the clean city balance squared away but not water. Anyway, good luck and definitely look for a water adjustment on the next HUD/CD.

Updated 6 months ago

One more thing to add... REO sellers refuse to escrow for anything. No bill, no pay. If the water was off at the time of your settlement, or the title company could not obtain a bill for some other reason, that could explain this.

Just wanted to follow up.  This is still a work in progress.  I have been waiting over 10 days for return phone call or email from lawyer.  I contacted the real estate agent and was provided with a document from the municipality that she had emailed both attorneys the day before closing with the water/sewer charge to date and the sanitation charge to date.  Also we got stuck with the sanitation fee from the previous year tacked onto the tax bill we received in January.  All of these numbers were disclosed on 12/26 to both attorneys.  The seller (bank) never paid them and now we are responsible as they are attached to the property.  I will be calling the closing agent today as well as the title company (but they may be one in the same I have to check).  

I'll be in touch to let you know!

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