October 2010 Vol. 3, No. 8
 

Underwriters' Bulletin

Claims Corner

Sanitary Sewer District Liens

There has been an increase in claims submitted for sellers&€™ unpaid sanitary sewer district bills. Sanitary sewer district charges and liens are provided for in 70 ILCS 3010/7.

Sanitary districts can charge those who live within a sanitary district for the use and service of the sewage system. The imposition of the charge is done by ordinance. The recording of the ordinance alone does not give the sanitary district a lien on the property for unpaid charges. To create a lien against the property, the sanitary district must send a delinquency notice to the owner of the property and must file the lien in the appropriate recorder&€™s office.

Sanitary district liens do not have super priority status. The statute specifically provides as follows:

 

 

Nothing in this Section shall be construed to give the sanitary district a preference over the rights of any purchaser, mortgagee, judgment creditor or other lien holder arising prior to the filing in the office of the recorder of the county in which such real estate is located, or in the office of the registrar of titles of such county if the property affected is registered under the Torrens System, of notice of said lien

 

 

 

Few claims that are submitted for unpaid sanitary sewer district bills involve recorded liens. A sanitary sewer district without a recorded lien does not have a lien that has priority over the rights of a purchaser. Since there is no lien that has priority, there is no title insurance coverage. However, ATG frequently encounters sanitary sewer districts that still attempt to collect the delinquent charges from a purchaser. Accordingly, a prudent purchaser that receives a title commitment that discloses a recorded ordinance for a sanitary sewer district would inquire as to whether the seller's sanitary district bills are paid through the closing.

If you have any questions regarding sanitary sewer districts, please contact the ATG Underwriting Department,legal@atgf.com, 217.403.0020, or 312.752.1990.

© ATG|Casenotes/Bulletin 1010_v3n8

[Last update: 10-11-10]

 

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