Here in the GTA and other parts of Ontario, water consumption is a metered utility. The occupant or owner may be billed quarterly by the city, regional municipality, or the local utility company. Like other utilities (e.g., natural gas & electricity), the seller is responsible for any consumption up to the date of closing.
However, unlike other utilities, water bill arrears can be carried forward and billed to the new owner. And from what I've seen, solicitors can overlook this in the closing adjustments.
One of my clients received a notice from the utility company for water bill arrears owed by the property's previous owner. Knowing that my client had title insurance, I contacted the insurer and confirmed that his policy covered the water bill arrears and that the deadline to file a claim had not lapsed. I assisted my client in preparing a claim, and in about a month, he received a cheque.
This incident came up in conversation with another client, and he remembered getting stuck with the bill on another property he had purchased directly through the listing agent. Unfortunately, too much time had elapsed.
Work with a knowledgeable and competent real estate professional who'll represent you and protect your best interests.