Posted by Tommy T on June 10, 2006 at 18:51:35:
I have had the same experience as Joe. Paid lots of them. No pay, no
water. I’ve had some knock-down, drag-out fights over this. The laws
vary, but bottom line here was, even though I cited case law to them,
the local water utility knew it would cost me way more than it was
worth to go to court and try and get a decision in my favor. The best
I’ve ever done was to foam at the mouth a little and make them think I
was crazy enough to go to trial, and got them to turn the water on for
a percentage of the outstanding bill.
Not mentioned here is the fact that in a conventional RE closing with
full escrow on a listed property, usually escrow handles paying
outstanding utilities, unless there is an addendum stating that it will be
handled outside of escrow.
On the other hand, when you are closing your own deals in-house, say
a sub-to or anything else, if you forget to check on outstanding util
bills and/or make it clear in your P&S that the seller is paying them,
you’ll end up paying them, because there is no one to turn to. In many
typical ‘distressed seller’ purchases, when you are just taking the
property off the seller’s hands quickly with little or no cash to them,
and they can’t/won’t/don’t care to pay back bills… do your homework,
figure it into your deal analysis. It’s seldom a deal killer to have to pay
these, but it comes right off of your bottom line.