Delinquent water bills pose ongoing challenges in real estate transactions. A municipality or county must record a lien to collect payment for delinquent water charges from a new owner. For a purchaser to have title insurance coverage for the delinquent water bill, a lien must have been recorded.

However, it is common for a municipality to attempt to collect payment for the delinquent charges from a purchaser without recording a lien. In particular, the municipal and county water companies often refuse service until back due amounts are paid, regardless of whether a lien was ever recorded. Therefore, if you are representing a purchaser you should contact the municipality prior to the closing to determine whether there are any outstanding water charges. If you are writing title or conducting a closing and asked about delinquent water charges, clarify for the parties that even if a lien does not appear on the commitment or policy, that there could be a delinquent water bill and no water service until the bill is paid.

Questions? Contact an Underwriter.