I’ve been noticing a trend in our blog stats. A lot of people seem to be finding us at they do searches on 2 topics pretty regularly: 1) decommisioning old oil tanks (heating oil), and 2) liens from a former owner’s water utility bill.
Now, I am required to make sure people realize I am not an attorney and I’m not giving legal advice, but since our team works daily in real estate transactions, it’s not uncommon for us to be familiar with the MLS forms used in contracts locally when agents are involved. If you’ve just closed a real estate transaction in WA State, you’ll want to refer to the main Purchase & Sale Agreement, page 3, section H where it states the “Seller agrees to pay all utility charges, including unbilled charges.” You’ll also want to get familiar with (Revised Code of Washington) RCW 60.80 which covers this subject.
In many cases, if you use Form 22K and you’re in a town that has a lienable utility (like City of Seattle’s water district), then this form gives instructions to the escrow/closing agent to pay off the final bill at Closing. This doesn’t shut off the service necessarily, but it helps limit surprises. Be aware that this is only for lienable utilities which tend to be utilities owned by municipalities such as cities or counties. Many utility companies aren’t allowed lien rights, such as Puget Sound Energy.
It’s difficult, if a seller walks away not having paid a bill, to get them to pay after the fact, and most buyers find a lawsuit (cost) or small claims court (time) too prohibitive to get satisfaction, but it’s always good to continue talking about these items and reminding other parties about their duties during the transaction to limit problems after the fact.
In the case of foreclosed or short sale properties, the likelihood of having something like this come up after closing is even bigger so be sure to do your homework and call local utilities to find out if outstanding bills are accruing, or ask listing agents to find out if the seller can provide details into unpaid bills. If someone is already financially distressed they may not be able to pay directly, but it’s possible that it could be negotiated in the sale. Home buying should be about fun and exciting new beginnings. So, be aware and be educated so you don’t drown in someone else’s water bill after closing and put a real “damper” on your experience.
