Outstanding water/sewer bill

2 Replies

Sixteen months ago I bought a REO property from Fannie Mae.

When I scheduled my property inspection during the due diligence period the agent was not able to get water turned on.  I was told by the agent they couldn't turn water on because there is an outstanding balance of $800+ on the account.  I said no inspection no deal, and eventually they were able to get water turned on for the inspection.  The RE agent told me they "took care of" the outstanding balance.

I knew there is an outstanding balance on the water, so before closing I called the city and got the total balance from them.  Most of that amount is from the owner Fannie Mae foreclosed on.  The city informed me that they will not be able to establish a new account in my name until the previous balance is paid off.  I notified my attorney to make sure this is addressed - either FNMA has to pay it off or we need to have funds set aside in escrow for it.

A few days before closing when all the emails are flying around between the closer, my attorney, the agent, about all the mistakes in the title commitment and HUD-1 etc...I raised the outstanding water bill issue again. One of the email I got from the closer's office said "she is going down to the city to take care of it this afternoon", and later on an email sauing "it's been taken care of" ... and the next day, I called the city and established a new account in my name.

Now, sixteen months later, I got a letter from the city saying there is an outstanding balance of $800+ from the previous owner, and it needs to be settled or a lien would be placed on my property.

I called the city and asked if the bill was ever paid, they said no.

Yet Fannie Mae's closer seems to indicate they have paid it off before closing.

Who is responsible for paying off the $800+ now?

Fannie Mae?  Because it was their intention to pay it and it never happened?

Me?  Since I am now responsible for the property?

The company who issued the title policy to me?

The broker who listed the home for FNMA who told me they took care of the outstanding balance when I did the inspection?

Follow-up with the closing company.  Ask them for documentation that they paid it so you can show to the water company.  

I had one where it was missed on the hud-1 and the closing company took care of it.

I would also contact the city and let them know how you are trying to correct the problem. It might save you from the city attaching a lien?

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