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Homeowner questions past due water bill and possible lien on property

By ERIC P. FEICHTHALER - Real Estate Law | Mar 2, 2023

Eric P. Feichthaler

Mr. Feichthaler,

I purchased my home here in Cape Coral about two years ago, and I purchased the property with the seller using a title company. From reading your prior articles, I know the law firm or title company that settles the transaction should ensure there are no liens against the property.

To my surprise, I received a letter last week from the City of Cape Coral that there was a past due water bill for over $800 from the prior owner. If I don’t pay it within 30 days, it will become a lien on my property, according to the letter. How can I be responsible for this? Shouldn’t the prior owner be receiving this letter?

— Russ E.

Dear Russ,

You are correct that it is our job as a law firm or title company to provide the buyer clear title at the time of purchase and closing. Our process includes a lien search with the city to determine if there are any code violations, utility bills, or other city liens. Any amounts due are collected from the seller at closing, and remitted to the city. We also update those searches right be-fore closing to ensure none are missed.

My first reaction to your question is the possibility of mistake by the city. Receiving a letter two years after the alleged use took place is surprising for sure. However, like any large organization, the city and their systems don’t always perform the way the city desires. I would contact the city to ask for details on the $800, including when the charges occurred, and that those amounts showed being due at the time of your purchase.

The letter is correct in advising that these bills can become a lien on the property. That is, the amount due attaches to the property, not the individual. So, a new owner is technically responsible for past water bills. If you confirm the amounts are actually due, I would recommend you reach out to the title company that handled your closing and ask them to show you what they had from the city from their lien search. If they had this information and didn’t collect, I would hold them responsible and request they pay for it. If the information they had indicated it was not due, I would go back to the city and advise them all amounts due were paid, and that you should not be responsible.

Another protection I use in a closing is an agreement between the seller and buyer. This agreement provides that, if amounts become due after closing that were unexpected relating to utilities, that the seller will pay them, even after closing. If your title company had the parties sign such an agreement, your recourse would be to contact the seller and request they pay. However, in my experience, prior owners seldom agree voluntarily to part with their cash after a property is sold. Although you would legally be in the right to these funds, you would have to commence a legal action against them if they refused to pay.

My hope is this is all a big mistake in the city’s billing system. I am optimistic that one of the above options will work for you so that these charges will not be your responsibility.

Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Museum of History, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney.com, or 239-542-4733.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.