Sewer Bill Mystery - Who Pays?

Question

Hello BPers,

I purchased a house with tenants in place and according to the lease they signed, the tenants are responsible for paying the sewer bill. Strangely, the month after I bought the home, the sewer bill stopped being paid. 5 months later it continues to remain unpaid and the bill continues to rise. When my PM asked them about it, he says they told him they've never paid the sewer bill.

Is it possible the former owner paid it all along, even though the lease states the tenant was supposed to?

How can I find out who paid it. Will the Water/Sewer Department tell me?

I was hoping my PM would have taken care of it by now, but for some reason it hasn't and I'm out of State. Now, a collections agency is involved.

Any suggestions?

Thank you.

Jill F. · Answer

What really matters is what is in the lease. Insist that the PM enforce the lease.

Philip C. · Answer

Update: Thank you all for your feedback. As some of you guessed, it turns out the previous owner was being reimbursed for the monthly sewer payment separately. In essence the cost was being passed down to the tenant. The good news is we spoke to the tenant and they have agreed to pay it monthly as the lease states.

Nate Richards · Answer

In Akron it arrives at the property address as "current resident or owner". Once it becomes past due (the following month) a bill is mailed to the service address and the owners address. What is in the lease DOES matter, the tenant IS responsible to pay it, but like rent, you can get stiffed on it. If your property manager is unwilling or unable to enforce your lease (or submetering) you need a new one, period. Full Stop.

In a good lease, failure to pay the water and sewer and maintain the balance current is a violation of the lease and subject to eviction. The landlord is simply responsible for paying it should the tenant ultimately skip out on you. Your PM should have filed eviction after month 1, month 2 if he was "working out any mis-communications" that occured during title transfer.

James Wise · Answer

The ole' water / sewer bill dilemma. I would imagine you are going to have to get used to paying this. Remember a lease can say whatever it wants to. That does not mean it's actually enforceable. Landlord tenant law of your municipality is going to trump whatever your lease says every time. I know you're in St Louis but here in the Cleveland market (as mentioned) people run into this issue frequently. So frequently that my company had to ad it to our online FAQ since so many people couldn't wrap their heads around it. I have copied it below for you as I am sure a lot of what is written below applies to you & what you are dealing with.

Q. I would like to charge the tenants for water and sewer. Will you bill my tenants?

A. No. The City of Cleveland, Division of Water will not pass water and sewer charges onto any individual other than the property owner. The water and sewer bill will ALWAYS remain in the Owner’s name therefore the ultimate responsibility of the water and sewer bill will ALWAYS fall onto the Owner.

See http://www.clevelandwater.com/customer-service/faq for more info.

Holton-Wise does not charge the tenants for water and sewer usage because of all the legal difficulties put in place by Ohio Landlord Tenant Law and the City of Cleveland, Division of Water. Holton-Wise recommends building water and sewer costs into the rental price because evicting for non-payment of a utility that is not in the tenants name is much more difficult than evicting for non-payment of rent. If the Owner wants to pursue an eviction case against a tenant for non-payment of water and sewer bills The Holton-Wise Property Group will have to refuse all future rental payments from the tenant and that Holton-Wise DOES NOT guarantee victory in any court case. Odds are very good that the Owner may lose the case. In the event of a lost eviction proceeding Holton-Wise will still bill the Owner for the normal eviction costs.

5321.04 Landlord obligations.(A) A landlord who is a party to a rental agreement shall do all of the following:

(1) Comply with the requirements of all applicable building, housing, health, and safety codes that materially affect health and safety;(2) Make all repairs and do whatever is reasonably necessary to put and keep the premises in a fit and habitable condition;(3) Keep all common areas of the premises in a safe and sanitary condition;(4) Maintain in good and safe working order and condition all electrical, plumbing, sanitary, heating, ventilating, and air conditioning fixtures and appliances, and elevators, supplied or required to be supplied by the landlord;(5) When the landlord is a party to any rental agreements that cover four or more dwelling units in the same structure, provide and maintain appropriate receptacles for the removal of ashes, garbage, rubbish, and other waste incidental to the occupancy of a dwelling unit, and arrange for their removal;(6) Supply running water, reasonable amounts of hot water, and reasonable heat at all times, except where the building that includes the dwelling unit is not required by law to be equipped for that purpose, or the dwelling unit is so constructed that heat or hot water is generated by an installation within the exclusive control of the tenant and supplied by a direct public utility connection;(7) Not abuse the right of access conferred by division (B) of section 5321.05 of the Revised Code;(8) Except in the case of emergency or if it is impracticable to do so, give the tenant reasonable notice of the landlord's intent to enter and enter only at reasonable times. Twenty-four hours is presumed to be a reasonable notice in the absence of evidence to the contrary.(9) Promptly commence an action under Chapter 1923. of the Revised Code, after complying with division (C) of section 5321.17 of the Revised Code, to remove a tenant from particular residential premises, if the tenant fails to vacate the premises within three days after the giving of the notice required by that division and if the landlord has actual knowledge of or has reasonable cause to believe that the tenant, any person in the tenant's household, or any person on the premises with the consent of the tenant previously has or presently is engaged in a violation as described in division (A)(6)(a)(i) of section 1923.02 of the Revised Code, whether or not the tenant or other person has been charged with, has pleaded guilty to or been convicted of, or has been determined to be a delinquent child for an act that, if committed by an adult, would be a violation as described in that division. Such actual knowledge or reasonable cause to believe shall be determined in accordance with that division.(10) Comply with the rights of tenants under the Service members Civil Relief Act, 117 Stat. 2835, 50 U.S.C. App. 501.

(B) If the landlord makes an entry in violation of division (A)(8) of this section, makes a lawful entry in an unreasonable manner, or makes repeated demands for entry otherwise lawful that have the effect of harassing the tenant, the tenant may recover actual damages resulting from the entry or demands, obtain injunctive relief to prevent the recurrence of the conduct, and obtain a judgment for reasonable attorney's fees, or may terminate the rental agreement.

James Wise · Answer

Sub metering is a useless activity, don't waste your time with it. Multi family with 1 meter, multi family with individual meters, sub-meters, single family homes.....The one thing they all have in common is that you the landlord is responsible for the water and sewer bill......Case closed.

Caleb Heimsoth · Answer

I had this happen to me when I bought a property In Cleveland.  Inherited tenants had never paid the water bill (despite it being in the lease), when they vacated by stiffing me a months rent I had to pay 800 bucks for the water and sewer bills they didn’t pay.  You’re probably going to have to pay this

Philip C. · Answer

Follow-up question to the update:

Assuming the tenant's decided not to pay the sewer bill, is it possible for the PM or owner to pay the unpaid sewer bills with the tenant's deposit, since they violated the terms of the lease?

Theresa Harris · Answer

Is it also possible that the previous owner paid the bill and the tenants reimbursed them?  You should be able to find out whose name was on the bill from the city or utility provider.

If it is in the lease that the tenant pays whether it is directly or indirectly, you need to have the PM enforce it.  You are paying the PM to deal with this.

Justin Juhan · Answer

Rent $950

"Water/Sewer/Garbage flat rate $50/month paid with rent"

I would not "include it in the rent" if your rent is 960 and your fee is 50, now your rent is 1010 for marketing this can really be a problem when people put a $1000 max filter on their search and other units in the area are marketed at 950-990.

Bob Hines · Answer

First off, water and sewer bills are from separate entities in St. Louis City & County. You're learning why you never have the tenants pay the sewer bill. Irregardless of what a lease says, MSD will take the owner to collections and file a lien against the property. The sewer can't be shut off to deny future service so it attaches to the property. Water you can have billed to tenants because if they don't pay the water gets turned off and they go after whoever's name is on the bill. But if the water gets turned off, you'll get a notice of condemnation because without water service, the house is uninhabitable. You will then have a few days to get the water back on-either you or the tenant will have to pay-and if anyone is still living there after the deadline and the water is not back on, you as the owner will have a code violation and a court date. If the tenants move out, you won't be able to re-rent to new tenants while the property is still condemned, so the water will have to get turned back on first. That's why it's customary to have landlords pay for water & sewer here. If you're in the city of St. Louis, there is a combined trash and water bill so trash is included as well. Some do pass these charges on to tenants, but you're finding out why many don't.

Sewer Bill Mystery - Who Pays?

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