Charged for unpaid water bill from 2011 - Do I have ANY recourse or options?

Question

Ohio landlords and attorneys--I need your help.

Our tenant left our property, and we contacted the landlord water company to resume service in my name. The water company is refusing because of an unpaid water bill from 2011. I bought the property off the MLS in 2018. The water company says it's my problem and the title company should have told me about the unpaid bill. I am still trying to reach my title company.

I did chat with my realtor, and he doesn't think the title company will help since the transaction was so long ago. I can't take the guy who didn't pay the bill or that property owner to small claims because the statute of limitations is up. Do I have any options or recourse at all?

Tom Gimer · Answer

Not Ohio specific, but I would bypass the title company and file a title claim directly with the title insurer. Find where to send this in the "Notice" section of your owners policy.

Ned J. · Answer

How much $$ are we talking?

The question is whether all the time and hassle of contacting the title company, the title insurance company, the water company, my real estate agent, looking up bills, writing and answering emails and phone calls and dealing with all the other stuff that is going to eat a lot of time and effort, is it worth the $$ I MAY...MAY.... recover.

Or do I eat the cost and move on with my life and focus on my investment and getting it back up and rented

PLUS you want the water back on soon..... and all the BS is going to take time

Nicole Heasley Beitenman · Answer

Update for all who are interested:

The title company I used to buy the property has since gone out of business, so we went to another title company we've done business with in the past. This is not the first time they've seen shady business practices from the water department. They confirmed that this delinquency would not have shown up in a title search because the water department doesn't put liens on the property. Their collections company does, but I called the collections company, and they have no record of the water department sending this delinquency to them. They also said title insurance likely won't cover this because a lien was never placed on the property, and the purchase agreement does state it's the buyer's responsibility to make sure water is paid in full.

That being said, I'm still going to file the claim because the worst that can happen is they deny me.

I spoke with an attorney who confirmed that it would cost thousands for me to fight this, and the bill is under $500. I'd have spent a few hundred to fight it out of spite, but not thousands. We did discuss ways I can protect myself in future purchases, and I gave him a good story to tell at his next happy hour; he'd never heard of a situation like mine before.

I told him I was going to file complaints with the attorney general, PUCO, CFPB, and my district's congressman, and he agreed with that course of action. I have 2 of those complaints filed and am working on the other 2 today. I'll then follow up on each complaint with a phone call.

My guess is that I'm being targeted because I'm a landlord. Ohio has a real problem with out-of-state slumlords, so we're seeing an increase in anti-landlord policies among individual counties/cities. But since OOS LL's are harder to go after, us in-state LL's typically end up paying the price.

Peter Walther · Answer

I'm certainly not an expert on Ohio water liens, but assuming this is a municipal water corporation, it appears Sec. 743.04 Assessment and Collection of Water Rents, Ohio Revised Laws and Administrative Rules, may control how unpaid bills for "water rents" are handled.  Section (A)(1) provides:

(1) When water rents or charges are not paid when due, the director or other official or body may do either or both of the following:

(a) Certify them, together with any penalties, to the county auditor. The county auditor shall place the certified amount on the real property tax list and duplicate against the property served by the connection if the auditor also receives from the director or other official or body additional certification that the unpaid rents or charges have arisen pursuant to a service contract made directly with an owner who occupies the property served.

The amount placed on the tax list and duplicate shall be a lien on the property served from the date placed on the list and duplicate and shall be collected in the same manner as other taxes, except that, notwithstanding section 323.15 of the Revised Code, a county treasurer shall accept a payment in such amount when separately tendered as payment for the full amount of such unpaid water rents or charges and associated penalties. The lien shall be released immediately upon payment in full of the certified amount. Any amounts collected by the county treasurer under this division shall be immediately placed in the distinct fund established by section 743.06 of the Revised Code.

(b) Collect them by actions at law, in the name of the city from an owner, tenant, or other person who is liable to pay the rents or charges.

My lay reading leads me to conclude that if the "the director or other official or body" did not certify the amount due to the county auditor or that the amount due was not included in tax list then the "the director or other official or body" elected to rely on (A)(1)(b) which provides:

(b) Collect them by actions at law, in the name of the city from an owner, tenant, or other person who is liable to pay the rents or charges.

Personally, I'd ask the person at the water department to explain what law the department is relying on to determine I, as the current property owner, is liable for the debt.

Ned J. · Answer

The bill was under $500? And how many hours did you spend trying to deal with this?

I get all the frustration and principle behind wanting the involved parties that F-d this up pay it......but after an initial pursuit of this issue and a few phone calls and emails that went no where, I would have paid that bill and moved on with my life

Tom Gimer · Answer

@Ned J. There are no time limitations looking back. If the lien (unpaid water is a lien in many jurisdictions) should have been discovered by the title company but was missed, owners title insurance should cover it.

Ned J. · Answer

@Tom Gimer.... I know that, but in my experiences with insurance companies what they "should cover" and what they actually will cover without a TON of work, time and effort forcing them to cover, are not the same when it comes to time frames of incident to claim.... they will try to pass the buck and deny responsibility until you become a huge PITA to them. So if the actual $$ is not that bad, I'd move on.

Alex L. · Answer

Wow, that's rough. All I can do is echo Tom. File the title claim with the title insurer, and hope for the best. Also, please keep us updated on how it goes.

Nicole Heasley Beitenman · Answer

In Ohio, the water bill stays with the property. They're legally able to charge me, but it's pretty shady that they let service transfer numerous times over more than a decade before deciding I'm the one they're going to fight for it.

Matt Devincenzo · Answer

Another consideration is do charges run with the land or the user in OH? In my states they run with the user, not land. So I've had a couple closings that added water/elec charges to my settlement. In every case I required they be removed since the charges were for a past tenant not me. They have always been removed and continue to remain unpaid unless that tenant pays them.

Charged for unpaid water bill from 2011 - Do I have ANY recourse or options?

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