Like a Bridge Over Troubled Water...Fees!
As most of you know with distressed sales being a large part of the local market for the last few years, we have had issues with past due water bills on properties. Some cities have attempted to collect from the new buyers the money owed from the past due bill. Or when the new buyer’s have the utilities changed over to their name, the cities will sometimes try to collect the past due amount from them. According to Utah State Law, this is not acceptable.
Title 10 of the Utah State Code (law) see 10-7-10.5(2) (a) A municipality may not use an owner’s failure to pay for water furnished or sewer service provided to the owner’s property as a basis for not furnishing water or providing sewer service to the property after ownership of the property is transferred to a subsequent owner. (b) A municipality may not require an owner to pay for water that was furnished or sewer service that was provided to the property before the owner’s ownership.
I’m not sure if it pertains to private water companies, but it would be a good idea to research their practices before moving forward. Talk with the Title person and check the HUDs to see if the past due fees are included. This is great information to quote to your buyers if this scenario presents itself when purchasing a short sale or foreclosure and they'll certainly appreciate the message.
What is the law in your selling area?
Thank you Jack Scott, Prado & Kramer Broker, for the Water Law information.
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