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First Time B…, Home Buyer in Temple City, CA

past due water bill for foreclosure home

Asked by First Time Buyter, Temple City, CA Tue May 31, 2011

I just bought a foreclosure home. When I set up an account for water service, they said that the new owner is responsible for the past due balance of water bill. I'd like to know if it's true & what I should do with the pat due balance.

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I always check this for my buyers. This is so important to do as an agent. I am sorry this happened to you. My only suggestion is to contact the title company to make sure this bill wasn't already paid. Sometimes the bill has been paid but there is a delay in the water company's computer system. If you find out it is in deed due, contact your agent and see what they can do to help you remedy the problem.
1 vote Thank Flag Link Tue May 31, 2011
Same thing happened to me. Experience is the best teacher. If you worked with an experienced foreclosure agent, they would have had this checked in the escrow period.

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1 vote Thank Flag Link Tue May 31, 2011
This is the first time I've heard of municipal liens on foreclosures so it's good to know. I know mechanical liens can transfer to the new owner. The bank owned the home before you and after the delinquent owner. It doesn't make any sense to me that they could hold your feet to the fire for someones debt and try to pass it on down the line like that. With a mechanical lien it kinda makes sense because you may be enjoying all the new construction upgrades to the home that did not get paid for by the previous owner. Paying for water you did not use is another thing. I would go back to the title company and the bank then the city or water company.

Good luck,

0 votes Thank Flag Link Tue May 31, 2011
The title company should have made sure the title was delivered free and clear of any liens, including past due bills from utility companies. However, as some of the agents have said, on REOs, this isn't always true.

My clients was socked with a garbage collection lien. Fortunately, it wasn't that significant, so rather than contest it, he just went ahead and paid for it. To contest it would have involved a lot of time among the buyers, the escrow officer, the agents...and there's no guarantee it would have been resolved satisfactorily.

I'd raise the issue on a matter of principle, with the title company and the utility. There's a certain sense of satisfaction in doing that....then hope for the best.

Good luck!
0 votes Thank Flag Link Tue May 31, 2011
Bring supporting documents to water company showing that you are the new owner.
You're not responsible for the past water bill. The water company will go after the previous owner through collections. They should be able to set up your water once they have the supporting document. Speak to the water company to find out which documents they exactly they need.
0 votes Thank Flag Link Tue May 31, 2011
I would make a call to your closing attorney and tell him/her what happened. This should have been
paid for and cleared by the seller, (bank) by closing. The amount should be indicated on your hud statement.
0 votes Thank Flag Link Tue May 31, 2011
I would show the city the settlement statement and/or the deed proving your are the new owner.
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0 votes Thank Flag Link Tue May 31, 2011
That's the nature of foreclosures... it's usually not just the mortgage that wasn't getting paid.

As Ron mentioned, try writing or visiting the water department. They may be willing to work with you or pursue the bill with the prior owner. Sometimes that's not the case and a lien is placed on the property for the past due amount. Lenders obtain MLCs (municipal lien certificates) to show what bills are due and what liens are placed. Your attorney or title/closing company should have done that for you.
0 votes Thank Flag Link Tue May 31, 2011
When that happened to me, I took the bill and some papers that proved that I just bought the house, down to the City and it was removed from my name. I cannot imagine any other outcome. But I would never to resolve this over the phone. good luck.
0 votes Thank Flag Link Tue May 31, 2011
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