Unpaid water and sewer charges

How is it found?

• The municipal search returns an open water and sewer balance against the block and lot
• The account shows estimated readings rather than actual ones, so the true balance is unknown until a reading is taken
• A frontage-charge property has no meter, which changes how the charge is calculated and apportioned
• The charge appears on a tax lien sale notice, because water and sewer arrears can be included in a lien sale
• A multi-family building has a single account and an owner who has been billing tenants separately

How is it cured?

1. Order the final meter reading early, because the reading, not the last statement, is what fixes the number at closing
2. Read the account for estimated billing, since an estimate that ran low for years produces a catch-up charge nobody budgeted for
3. Pay the balance at closing from the seller’s proceeds and apportion the current period as of the closing date
4. Where the reading will not arrive in time, escrow a reasonable holdback and release it against the final bill
5. Where a leak or a broken meter caused the balance, apply for the adjustment the agency provides rather than paying the estimate

What does clearing it cost?

The charge itself is the cost, and it is a usage bill rather than a professional fee. What surprises people is the catch-up when years of estimated readings are trued up against an actual one. Ordering the reading early is what keeps that from landing on the closing statement as a surprise.

Who pays for it?

The seller pays through the closing date and the buyer takes it from there, which is the ordinary apportionment on a New York closing statement. Because the lien runs with the land, a buyer who closes without paying or escrowing the balance inherits it, so the escrow protects the buyer rather than the seller.

What else should you read before closing?