Surprise! You Owe Thousands of Dollars!

I received the following email from a reader. He explains the issue quite well, so I’ll let his message do all the talking:

My wife and I bought our home a year ago in Mill Creek, Snohomish County. On Friday, we received a bill from King County instructing us that we owed them over $2,000, payable in 48 easy monthly installments. This bill was for sewer capacity. The previous owner had stopped paying this bill.

Needless to say, I was a little confused. We already paid Alderwood Wastewater a sewer bill every month. Anyway, I did a little looking, and it looks like Snohomish struck a bargain with King County that it could charge Snohomish County citizens big bucks for having their sewage treated in King County. I already pay for a sewer bill with Alderwood, but apparently this involves them carting it to King County.

My main bone of contention: for all new homes, the amount of sewer capacity debt a buyer takes on is a pretty hefty $10,000. Why is this not billed to developers? The FAQ says, helpfully: ‘because that’s how we wrote the law.’

I think you and I know why. If Snohomish and King home buyers knew they were taking on $10,000 of debt on top of the price of the home, they might not buy. Fewer short sales would go through, and the housing market could be more depressed. The alternative? Sneak that big bill in under the radar!

Their phone line makes it clear that whether or not the charges are known to the home buyer, they’re on the hook! And there’s absolutely no recourse, short of selling the home and passing it off to some other sucker (while paying a fortune in fees)

When one buys a home, they don’t pay itemized fees for the permits, the road extensions / expansions, the new traffic signals, the expansion of the power grid. Some of that is spread evenly among the populace, and when it’s not, it is charged to developers, and passed on to homebuyers, so they know exactly what they’re getting into.

I work for an electrical utility. Seattle City Light power is mostly transported through PSE utlity lines, and is mostly generated by the Bonneville Power Administration. Seattle City Light doesn’t allow PSE and BPA to bill their customers separately for this privilege, it’s all wrapped up in the cost of power to their customers.

The fact that utilities are interconnected is not a new phenomenon; asking a few new customers to pay thousands for capital projects is. Utilities need capital projects to keep up with demand all the time. It’s called expanding your customer base, and every other utility I’ve ever dealt with spreads out the cost and are happy with the long term gains.

This law may have been in effect for quite a while, but I’ve never heard it discussed before. I also find it hard to believe that it is just or ethical to charge new developments special fees. We don’t typically charge special fees to older neighborhoods because their roads or infrastructure are old and need to be repaired, do we?

Getting a bill like this out of nowhere seriously has me on edge. What else will come down the pike that my family’s not ready for? Special fees for police and fire fighters? A library tithe? School capacity fee?

Have any other readers had an experience like this with an unexpected bill for thousands of dollars to a municipality that you don’t even live in or receive direct service from?

[Update]
A representative from King County responded in the comments. Here’s a portion of their remarks:

As our region grows, our need for new sewage treatment capacity increases as well. Since 1990, King County has levied a capacity charge on new connections to the sewer system that new customers pay in addition to their monthly sewer bill. The capacity charge covers the cost of new projects and system expansions to serve population growth. The Wastewater Treatment Division directly bills newly connecting customers for the capacity charge. Only new connections within King County’s service area will be assessed a capacity charge — our 420-sqaure-mile service area extends from as far north as Mill Creek down to a portion of Pierce County. The sewer service area was based on watersheds, not political boundaries.

Elected officials, sewer utility representatives and jurisdiction officials were all involved in King County’s decision to implement a capacity charge to ensure that “growth pays for growth”. At the root of the capacity charge is the issue of fairness. Property owners who paid for the cost of past system expansions are not expected to pay for new capacity generated by new construction.

Read their entire response below.

  

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

230 comments:

  1. 1

    My Bill to King County Sewer Was about $1000, a Year Ago

    Same corrupt logic, we can bill ya, so we will.

    Rate this comment: Thumb up 0

  2. 2
    Feedback says:

    Tim, I received one of those bills last year and promptly threw it away. I’ve never heard from this so-called agency again. If these men believe they are owed thousands of dollars, they can kindly point out the section of the law that makes me obligated to pay.

    Tim, you’re a smart man — you don’t believe everything that you’re told. Neither do I. Stand your ground!

    Rate this comment: Thumb up 0

  3. 3
    Eastsider says:

    If you purchase a new home, the builder should have disclose it during the sale.

    You can’t just throw the bill away. They will put a lien on your house.

    You have a choice of paying it off or paying it monthly with interests. You can find out the interest rate from King County to decide if you want to pay it off.

    Rate this comment: Thumb up 0

  4. 4
    wreckingbull says:

    According to the FAQ, we should look to our trusted real estate agents to handle disclosure to prospective buyers. Anyone know why this did not show up in escrow? If it was not properly disclosed, could our reader have legal recourse?

    Rate this comment: Thumb up 0

  5. 5
    ChefJoe says:

    I thought that was how the whole Brightwater plant construction was snaked through by Ron Sims. The costs of the new plant would be paid for by new construction… so everyone who thought they were staying put in their vastly appreciating homes (or figured the 8% yearly gain would more than cover it) were appeased and voted to have the new guys pay for it.

    My understanding is that the monthly brightwater fee is $52 so you must have several years worth of missed payments they’re after you for. Similar to how you’d owe back taxes on a property I guess.

    Rate this comment: Thumb up 0

  6. 6

    Agents generally know about this. It’s even a choice on the Purchase and Sale agreement as to whether the seller has to pay it at closing or the buyer assumes the charge. If that wasn’t explained to the buyer, it’s the agent’s fault to some extent, and the client’s fault for not reading the Purchase and Sale agreement (Form 21, page 1, paragraph 15 and page 3 paragraph H.)

    Rate this comment: Thumb up 0

  7. 7

    This link within Tim’s FAQ link above is very useful in dealing with Snohomish County properties. I have probably sent it to at least two agents within the past 30 days.

    http://www.kingcounty.gov/environment/wtd/About/System/ServiceAreaMap.aspx

    Rate this comment: Thumb up 0

  8. 8

    By wreckingbull @ 4:

    According to the FAQ, we should look to our trusted real estate agents to handle disclosure to prospective buyers. Anyone know why this did not show up in escrow?

    For some reason it’s not considered a lien against the property. It does, however, show up on preliminary title commitments. This is from a Ticor commitment for a property in Snohomish county.

    11. Liability for Metro Sewer Capacity Surcharges:
    Inquiries regarding sewage treatment capacity charges should be directed to King County Department of Finance. Fax request, including the property address to 206-263-6073.

    It would show up at escrow only if the P&S agreement says that the seller will pay the amount at closing.

    There is also this language in the preliminary commitment, which would cover this charge and any unpaid water bills.

    6. Any lien for service, installation, connection, maintenance, tap, capacity, or construction or similar charges for sewer, water, electricity, natural gas or other utilities, or for garbage collection and disposal not shown
    by the Public Records.

    Rate this comment: Thumb up 0

  9. 9

    BTW, the reader’s understanding of other utilities is not entirely correct. This is basically a charge for expanding the system. With natural gas, for example, if the gas line is three houses down, you have to pay to bring the gas line to your house, and then pay to bring it onto your property. If you do that, and then the house next door decides to connect five years later, I don’t think there’s a way of you recovering the cost of putting the line in the street (although I think there may be for some limited time).

    The sewage system tends to work a bit differently. Rather than expand it piecemeal like the gas system, they typically do an entire neighborhood, taking the connection to each property’s curb. They don’t charge for having done that until you actually connect to sewer.

    One more thing. Apparently there are some parts of King County where the water/sewer district will charge you for sewage usage (not this connection fee) even prior to the time you are connected! That’s a bigger scam IMHO than this capacity charge thing. This capacity charge thing is just how they allocate the cost of bringing a sewage system to the property. Charging for sewage usage prior to connecting is a way to try to coerce owners to connect to sewer (go off septic).

    Rate this comment: Thumb up 0

  10. 11

    RE: Doug @ 10 – I’m not saying it’s exactly the same as the gas system. I was only comparing it to the cost of bringing gas to your property (and distinguishing between that and the cost of bringing it onto your property). You’re right though that they are also including other things in beyond just the pipe for the immediate neighborhood. Notice I did not say your understanding was wrong, but instead “not entirely correct.” ;-)

    Getting back to the gas thing though, my understanding is you can effectively finance the cost of bringing gas onto your property by agreeing to pay a higher rate for gas. I assume that passes on to a subsequent owner without their knowledge. I’ll have to look into that.

    As to how you know, ideally your agent would explain that to you, but again there is also the contract. Did you have an agent? Typically I go over this every time a contract is signed.

    Finally, again escrow does not bring it up because it’s not an escrow issue. It’s only an escrow issue if you checked “paid by seller” on paragraph 15 of page 1 of the purchase and sale agreement. Escrow only deals with items to be paid by them.

    Rate this comment: Thumb up 0

  11. 12
    Jamie says:

    These real estate brokerages have insurance and so do the title companies. I would seek legal recourse for failure to disclose if that was the case. They will settle if the paperwork is clear and the disclosure is missing. This disclosure must be in writing. If you did not to read your documents….

    Rate this comment: Thumb up 0

  12. 13

    The Washington State discloure form covers this issue. Was he provided a Form 17? Was this new construction or re-sale? The burden of disclosure is with the seller, not the real estate agent.

    Rate this comment: Thumb up 0

  13. 14
    Dweezil says:

    It seems that with all the money being passed out when you buy a home, someone should know about this outstanding debt and bring it to the table.

    Rate this comment: Thumb up 0

  14. 15

    RE: Julie Lyda, RE/MAX Northwest Realtors @ 12 – Thank you. That is a third way that the buyer should know.

    I don’t agree though with leaving the agent off the hook. It’s a choice to be made on Form 21, and thus I think the choice needs to be explained, and the agent is arguably on the hook for the choice if it isn’t explained.

    In that regard I recently heard of an agent being sued for malpractice for checking box 2 of Form 22D, for standard title insurance. The buyer then had a loss that would have been covered if the boxes had been left blank. I would view this as being very similar to that.

    Rate this comment: Thumb up 0

  15. 16
    David Losh says:

    This is another Seattle Bubble OMG! moment.

    Let’s talk about it.

    The listing agent didn’t disclose, the buyer’s agent didn’t have that on the forms? and it was missed in escrow. OK, the money is still owed, it’s 48 payments, you either pay it, or sue the Real Estate agent, and escrow. Welcome to Real Estate.

    Rate this comment: Thumb up 0

  16. 17

    Kary, I’m not talking about letting the agent off the hook, but let’s start at the beginning of this transaction to see how this fell through the cracks. We need more information, and we should start with the Form 17.

    Rate this comment: Thumb up 0

  17. 19
    Derek Schlicker says:

    I got nailed with the exact same charge.

    Fortunately (maybe?) for me, the developer and my redfin agent (Kathryn Rion, who did great work) both disclosed it to me. I wasn’t happy about the debt but I got a great deal on my house so I’m not too bent out of shape about it, and I knew about it up front.

    I will say though that this Snohomish/King county agreement is a little shady, but coming from a lifelong resident of the two counties, I can’t say that I’m surprised things like this happen.

    Rate this comment: Thumb up 0

  18. 20

    By David Losh @ 16:

    This is another Seattle Bubble OMG! moment.

    Let’s talk about it.

    The listing agent didn’t disclose, the buyer’s agent didn’t have that on the forms? and it was missed in escrow. OK, the money is still owed, it’s 48 payments, you either pay it, or sue the Real Estate agent, and escrow. Welcome to Real Estate.

    No way is the listing agent or escrow responsible (unless it was supposed to have been paid by the escrow). Neither entity represents the buyer.

    Rate this comment: Thumb up 0

  19. 22

    RE: Doug @ 18 – I’ll agree it’s different, but I don’t necessarily see it being unfair. Why should someone in Seattle proper living in a 1950s house have to pay for the sewage system to be expanded? No matter how you cover the cost, it’s going to be unfair to some extent. If you added it to the regular sewer bill, it would be unfair to those living in Seattle proper in a 1950s house and to almost everyone who uses a lot of water for their lawns and gardens. No system is perfect.

    I think the big problem here is that you were not made aware of this prior to the time you made your offer (or simultaneously with signing the offer).

    Interesting point that the median price of new construction should effectively be almost $10,000 higher.

    Rate this comment: Thumb up 0

  20. 24

    RE: Doug @ 23 – It’s nice that they offered to pay part.

    BTW, it’s not just houses built in the last few years. It depends on when they were connected to sewer. I most recently had a discussion about these charges on a house built in 1975.

    Rate this comment: Thumb up 0

  21. 25

    RE: Doug @ 23

    Doug – Was this charge disclosed in the Form 17? Or did you not recieve a Form 17?

    I actually appreciate the topic… It can be a learning experience for all.

    Rate this comment: Thumb up 0

  22. 27

    RE: Doug @ 26 – If the water pipes in your neighborhood go bad, you’ll likely be charged under an LID. Not sure about the sewer pipes given this capacity charge.

    Again though, the 24 hour short sale has nothing to do with this. You should have been informed of this when you signed the contract–before the seller even saw your contract.

    BTW, if this was a short sale, you really had no choice as to the buyer paying it. At most you could have reduced the price. And the bank wouldn’t probably take that charge into account when determining whether your price was adequate. They sometimes don’t take other things into account, like past due water bills.

    One more thing on the bank not taking this into account. I’m often called by appraisers asking if the sales price included seller financing concessions. I’ve never been asked about a capacity charge or the choice made on Form 21.

    Rate this comment: Thumb up 0

  23. 29
    wreckingbull says:

    In the end, this is nothing more than a poorly managed public utility. The fact that there is even a ‘capacity charge’ at all tells us this. As Doug notes, this all needs to be handled through traditional monthly revenue.

    I had to pay a very expensive ‘capacity charge’ for some raw land I own in Bonner County, ID, and I don’t even have a sewer hookup nor am I a customer of the sewer district. Another example of poor utility planning and management.

    Rate this comment: Thumb up 0

  24. 30
    Doug says:

    RE: Kary L. Krismer @ 24

    Now that’s truly awful!

    Re: your comment about sewer lines in # 26, I was referring to utility owned lines in the ROW. the utility has a responsibility to maintain their facilities. those include utility mains and maintaining the capacity of their system.

    Rate this comment: Thumb up 0

  25. 31

    By wreckingbull @ 28:

    In the end, this is nothing more than a poorly managed public utility. The fact that there is even a ‘capacity charge’ at all tells us this. .

    Huh? How do you get to that conclusion? Expansion of the system has to be paid for in some manner, and they are choosing to assess new connections. That seems rather logical.

    As to the overall cost, that’s mainly due to US government law which requires the output to be incredibly clean, while Victoria to the north dumps sewage in completely untreated. I could see having high treatment requirements for say the Mississippi river, where people downstream have to drink from the water, but seeming a slightly lesser standard could be used in Puget Sound, thereby saving millions of dollars.

    Rate this comment: Thumb up 0

  26. 32

    RE: Doug @ 30 – I know the city of Seattle charges for new water lines as an LID. It happened at my condo. Fortunately though I only paid for the front footage on the lot, divided by 20 (10 stories with two units on each side of the building).

    Rate this comment: Thumb up 0

  27. 33
    K says:

    Let’s keep in mind we’re talking about $41 a month for legally collected fees. I pay more than that a month in Starbucks drinks alone. Or a single dinner out with my girl (or 2/3 of a dinner out with the whole household).

    The OP is complaining because he didn’t know about the fees, and nobody told him. Whose fault is that? MUST BE THE GUBMINT. Not, you know, the self-interested, profit-driven realtors and seller (not a criticism, just a natural fact) in the transaction who failed to disclose what they, in all ethical honesty, should have. OTOH, LTBB and RTFM.

    Rate this comment: Thumb up 0

  28. 34

    By K @ 33:

    Let’s keep in mind we’re talking about $41 a month for legally collected fees. I pay more than that a month in Starbucks drinks alone. .

    If you’re drinking that much Starbucks, you’re contributing to the need for an expanded sewage system! You should pay too! ;-)

    Rate this comment: Thumb up 0

  29. 35
    T. Y. Lee says:

    Well, I think I need to go re-read my contract and see if I am on the hook for this charge, since I’m buying new construction. Thanks for the heads up! The thing is, the price of my house went up by $5K (to utilize gas, which many buyers prefer), so I wonder if they had already accounted for this other fee in the house price. I hope so, anyway.

    Rate this comment: Thumb up 0

  30. 36
    No Name Guy says:

    Kary has hit the nail on the head on this in reference to being more or less like a LID. For those that don’t know, LID = Local Improvement District = (in common vernacular) an Assessment. A specific improvement is done that provides a quantifiable benefit to specific properties. Those properties that benefit pay for said specific improvement. To the person in Bonner Idaho – will your property “perc”? Are septic systems even allowed? If not, then it’s worthless for anything other than timber or grazing land without sewer service, for example.

    This capacity charge is more or less a LID on new connections, only instead of being assessed via the county treasurer, its “merely” a bill from the utility. I’ll agree with Doug that it IS somewhat shady in the sense that with a LID / Assessment, there is a specific PUBLIC record, by property, that will appear in a Title search so prospective purchasers will have this disclosure – no surprises. In this case, as it turns out, it appears the disclosure failed for what ever reason, which SEEMS to be a big part of the gripe on Doug’s part

    As to the fairness issues – I can totally see a 1975 house having to pay this (as mentioned by Kary). In fact, at some point, I’ll pay it on my 1962 built house…..once I switch from being on a septic tank to having sewer service. In some respects, I can hardly wait to get sewer up my street – I won’t have to worry about digging up my back yard every few years to pump out the tank – a nasty task if ever there was one. I’ll take the extra monthly bill to “flush and forget”, but that’s what works for me.

    Rate this comment: Thumb up 0

  31. 37
    me says:

    Larger question: what is it with the US and the bizarre situation of billing? I have a friend who’s just been through that – his Dr charged him $5k for a procedure he never got… he went to court, and got forced to pay… should I just stop working and start sending folks bills instead?

    Rate this comment: Thumb up 0

  32. 38

    RE: No Name Guy @ 36 – I only brought up the LID to show that some utilities do charge you separately for updating the system. It’s not included in the usage fee.

    When you do connect there will be other charges too! The local sewer district may charge you their own fee (not sure how that’s paid), and of course you’ll have to pay to ditch the pipe to the connection. Those charges can easily double the cost of connecting to sewer. So pump that septic tank frequently! (And next time invest in a riser or two to make the job easier.) If I had septic, I’d want it to last as long as possible.

    Rate this comment: Thumb up 0

  33. 39
    ARDELL says:

    Once again Kary is technically correct and yet oh so wrong all at the same time. The little check box on page one of Form 21 (main Purchase and Sale agreement) only says who will pay “assessments” without defining in any way what those assessments may be.

    While it is true that disclosure falls to the seller and not the agent…that logic takes a twist (and hopefully Doug’s pursuit of this issue will bring this to light) when the agent by checking a box obligates a home buyer without disclosure of what they are “assuming” as to “assessments” as a one word catch all. To those reading, this checkbox is relatively new in real estate contracts, and while attorneys deemed this one line resolved an issue…it actually made it MUCH worse for home buyers. Only an attorney would think it resolved anything. Speaking of the attorneys who put it there and not Kary, though Kary would rightly agree with all attorney type things…he being more of an attorney than a real estate agent.

    Apologies to Doug for taking this on a slight tangent re sewer assessments in King vs Snohomish. Within King you often have a mix of Local Municipality and County charges mixed together when talking about sewer capacity issues.

    Example from last week. Kirkland just north of 85th in Rose Hill. All of the homes are on septic and have been since they were built in the late 50s and early 60s. Builder puts in 4 or 5 homes at the end of the street. Should the builder be charged for the sewer line down an entire street and up to the land where the new homes will be? Should the builder pay for public sewer lines all the way from 85th past 40 homes to the new houses being built?

    The obvious answer is no. There are two ways to handle this. One is called “late comers” where the builder does pay, but gets partial reimbursement every time one of the 40 homes on the line connects to the public sewer line that the builder paid for in advance. The other answer, which applies to the neighborhood I am addressing, is called “emergency sewer” and the City pays for it and attaches a many thousands of dollars monster lien on every home along the line…but…they are still on septic! :) This is a complex issue. The County doesn’t even get involved until the home connects to that sewer line…and still there is a $15,000 lien on the house to be paid.

    So when you buy one of these older homes on that street, the real estate and escrow part is that the $15,000 LIEN has to be paid by the seller in order to give the buyer “clear title”. BUT the home is still on septic. If the buyer elects to connect the house to that line, the buyer has to pay for that connection to the City along with permit and contractor fees…and then…the long term County cost kicks in on top of that.

    Escrow only deals with liens and the lienable utility aspects of a home sale. Utility bills in and of themselves are rarely if ever part of the home buying and selling process. When we go in the kitchen and turn on the gas cooktop, we do not “disclose” that there will be a gas bill after you own the home to pay for that gas you will be cooking with, nor does escrow pay the previous owner’s gas bill up to the day of closing in areas where gas is not “a lienable utility”…as is the case in most areas.

    Adding more mud to this issue than clarity, I understand. But in King County ANY home built after 1990 likely has this issue and it is just handled “in due course”. In fact if you check the King County site it recommends that owners NOT pay these as “assessments” in full, but that they pass the extra monthly charge on to the buyer of their home.

    Sorry to not have links…am still on vacation in LA until tomorrow. The short of it is the up front cost of the connector pipes to provide capacity usually must be paid to the local municipality and are actual liens to be cleared by escrow when a home is sold. The ongoing capacity charges paid to the County are more often passed as a monthly charge from owner to owner and escrow generally only pays for the amount up to the date of closing, and not the full amount that was spread out over 15 years or so. If you are buying a newer townhome in Seattle, as example, you are likely getting this long term payment arrangement. It is very rare for the seller to pay it off at closing.

    You will not find the answer to sewer charges for the home you are about to buy on a blog. You will often not find them out in escrow either. You have to go to the City AND the County to get all of the answers…even if you are buying a home that is on septic vs public sewer. Odd…but true.

    Due diligence is required.

    Rate this comment: Thumb up 0

  34. 40

    By ARDELL @ 39:

    Once again Kary is technically correct and yet oh so wrong all at the same time. The little check box on page one of Form 21 (main Purchase and Sale agreement) only says who will pay “assessments” without defining in any way what those assessments may be..

    Where I first indicated it was choice 15, I also indicated the paragraph of the purchase and sale agreement that defined the term.

    the client’s fault for not reading the Purchase and Sale agreement (Form 21, page 1, paragraph 15 and page 3 paragraph H.)

    In case you haven’t noticed, the 2nd page and on of the P&S defines many of the choices on the first page. To say it’s an undefined term is absurd.

    Rate this comment: Thumb up 0

  35. 41
    Lily says:

    So if King County’s population increased and it needs a new school building, would it charge $10k to each new tax payer in the region? Of course not, the cost would be spread over many years over all tax payers.
    If AT&T needed new cell towers to serve more customers, would it charge $10k to each new customer? Of course not, it would use the new revenue to pay for the infrastructure over time.

    I’m sure this sewer capacity charge decision was made to appease existing home owners and voters. The decision to not charge the developer was probably due to lobbying by developers.

    Rate this comment: Thumb up 0

  36. 42
    Jamie says:

    Agents have a fiduciary duty under WA law. They do not get let off the hook if they are asked about any obligations that come with buying the house and the agent does not complete the required diligence. Agents cannot just ignore these things. The forms are not the end all be all. Ask your agent to investigate any obligations that come with being an owner. An agent should earn their commission. First it was the record companies, soon it will be the publishing industry, and on the publishers heels will be the real estate commission (of course, there will be exceptions). Fee based services will be the future for realtors.

    Rate this comment: Thumb up 0

  37. 43
    John Bailo says:

    I was looking at a listing in Kent yesterday in the 150K to 200K range.

    There was one nice looking home, but then buried in the description it mentioned that the buyer would be liable for a “93K” sewer charge. I assume that means $93,000 making the price of the house almost a third more!!!

    Rate this comment: Thumb up 0

  38. 44

    By Lily @ 41:

    So if King County’s population increased and it needs a new school building, would it charge $10k to each new tax payer in the region? Of course not, the cost would be spread over many years over all tax payers. .

    Actually there are charges associated with new developments. They just are not charged to the end buyer like these charges.

    Rate this comment: Thumb up 0

  39. 45

    By Jamie @ 42:

    Agents have a fiduciary duty under WA law. They do not get let off the hook if they are asked about any obligations that come with buying the house and the agent does not complete the required diligence. Agents cannot just ignore these things.

    I would agree, but that duty does not flow from being a fiduciary. It flows from the standard of care in filling out forms, in this case, by the buyer’s agent.

    Rate this comment: Thumb up 0

  40. 46

    By John Bailo @ 43:

    I was looking at a listing in Kent yesterday in the 150K to 200K range.

    There was one nice looking home, but then buried in the description it mentioned that the buyer would be liable for a “93K” sewer charge. I assume that means $93,000 making the price of the house almost a third more!!!

    I would assume they meant $9.3k, unless maybe they left the water on for a couple of years, and didn’t pay their bills.

    Rate this comment: Thumb up 0

  41. 47
    John Bailo says:

    RE: Kary L. Krismer @ 46

    Ok.

    Normally, K means 1000, and so 93K means 93000.

    But I do not know this strange language you realtors speak.

    Rate this comment: Thumb up 0

  42. 48
    TeacherGreg says:

    Lets not forget the surcharge on the overcharge…standard really.

    Rate this comment: Thumb up 0

  43. 49
    S-crow says:

    This is really not a utility issue per se but a disclosure issue with new and existing property. We close new homes and new developments and take the time to let people know about the sewer capacity charges and what it means. However, every agent that sells any property should know how sewer capacity charges impact their clients.

    1) Any property in the King County Sewer service area connected after Feb. 1st 1990 (from King County website) is subject to a sewer capacity assessment(paid over a 15 yr period).
    2) Capacity Charges do not show on the Title report, however, they are commonly referenced on the title report as notations for “potential assessments.”
    3) As matter of routine escrow at our company, we order Sewer Capacity Statements on ALL existing and new property on transactions we are involved with. ALL.
    4) If the buyer has assumed the possible assessments by checking the box on line 15 of the Purchase & Sale Agreement (NWMLS Forms) and we have the Sewer Capacity charge statement showing an amount owed, the statement is then provided to the buyer to review at signing.
    5) If the seller pays, then the total amount is paid from their proceeds.

    ~S-Crow

    Rate this comment: Thumb up 0

  44. 51

    RE: Doug @ 50 – Assumed probably isn’t technically the correct term. “Subject to” would probably be better. If I get a chance I’ll try to look up the applicable statute/ordinance.

    The biggest problem I have with this program is the lack of automation. There’s no website you can go to which would give you even limited information, like: “Is the property currently subject to a capacity charge.” I can see why you might not be able to get a balance on-line, but you should at least be able to find out if there is one.

    BTW, except where a buyer negotiates the payment of the charge, I doubt it’s ever paid off early. I don’t think they give you any kind of a discount for doing so.

    As to your comment about LID, there the shortcoming for my condo was the water pipes were put in sometime between 1900 and 1910. That was perhaps apparent though, since I was right across the street from the Stimson-Green Mansion. ;-)

    Rate this comment: Thumb up 0

  45. 52
    wreckingbull says:

    By Kary L. Krismer @ 31:

    By wreckingbull @ 28:
    In the end, this is nothing more than a poorly managed public utility. The fact that there is even a ‘capacity charge’ at all tells us this. .

    Huh? How do you get to that conclusion? Expansion of the system has to be paid for in some manner, and they are choosing to assess new connections. That seems rather logical.

    I completely disagree. Incremental capacity should be paid for by regular revenues. The reason they now choose to apply special assessments to new(er) connections is that they have not properly planned the system. Your waste stinks just like a new homeowner’s waste stinks.

    By the way, comparing the outflow of Puget Sound to the outflow Straight of Juan de Fuca is not accurate in any sense. Very different dynamics at play.

    Rate this comment: Thumb up 0

  46. 53

    By wreckingbull @ 52:

    By Kary L. Krismer @ 31:
    By wreckingbull @ 28:
    In the end, this is nothing more than a poorly managed public utility. The fact that there is even a ‘capacity charge’ at all tells us this. .

    Huh? How do you get to that conclusion? Expansion of the system has to be paid for in some manner, and they are choosing to assess new connections. That seems rather logical.

    I completely disagree. Incremental capacity should be paid for by regular revenues.

    That is “in some manner. I would consider that very unfair because existing users would continually be paying for new users.

    The reason they now choose to apply special assessments to new(er) connections is that they have not properly planned the system. Your waste stinks just like a new homeowner’s waste stinks.

    There’s no evidence of that. Expanding the system costs money. As you note, they could just charge everyone more.

    By the way, comparing the outflow of Puget Sound to the outflow Straight of Juan de Fuca is not accurate in any sense. Very different dynamics at play.

    True, but that doesn’t mean that they couldn’t have some lesser standard for discharging into Puget Sound compared to discharging into Lake Washington, as opposed to discharging into the Mississippi River at St. Louis. Having the same very high standard everyone is wasteful.

    Rate this comment: Thumb up 0

  47. 54
    Basho says:

    Accommodating new development was the sole reason for the expansion of the King County Sewage system. With more efficient fixtures and appliances, water use per household has generally been decreasing. While the capacity charge is not perfect, it is certainly more fair than asking all ratepayers to pay for projects that principally benefit new connections.

    Rate this comment: Thumb up 0

  48. 55

    The statute which authorizes these capacity charges is RCW 35.58.570.

    http://apps.leg.wa.gov/rcw/default.aspx?cite=35.58.570

    That statute allows it to be collected the same as water lien under RCW 57.08.081.

    http://apps.leg.wa.gov/RCW/default.aspx?cite=57.08.081

    That lien has priority over all other liens except real property taxes. You don’t have personal liability for either, so the word “assume” is really inappropriate, as is the title Tim gave this piece! ;-)

    Rate this comment: Thumb up 0

  49. 56
    wreckingbull says:

    RE: Basho @ 54 – Having adequate wastewater treatment capacity benefits all connections equally, not just new connections. If we are just talking about laying the new lines to new neighborhoods, OK, yes, the developer/new homeowner should bear the brunt of the cost, and that cost should be paid in full when the home first sells.

    This is not what we are talking about with the KC capacity charge. Revenue from this additional charge goes largely to wastewater treatment plants. Kary may have a point about standards, although I have never seen evidence that we are overtreating our wastewater.

    Rate this comment: Thumb up 0

  50. 57
    ARDELL says:

    RE: Kary L. Krismer @ 40

    Kary…don’t know who you are quoting in the 2nd quote there. Pretty sure I would never say “it’s the client’s fault…” double checking, but it just doesn’t sound like something I would say. I don’t blame my client’s for things like that…ever. I think you may be quoting yourself and answering yourself.

    Rate this comment: Thumb up 0

  51. 58

    RE: ARDELL @ 57 – That was me quoting what I said when I referenced what part of the P&S contract applied. I was talking about a choice to be made and later a description of that choice. The full sentence was:

    If that wasn’t explained to the buyer, it’s the agent’s fault to some extent, and the client’s fault for not reading the Purchase and Sale agreement (Form 21, page 1, paragraph 15 and page 3 paragraph H.)

    I’m not sure exactly how I would divide fault between a client and an agent in that instance. I think clearly the agent should bare the bulk of the fault, but the client isn’t totally off the hook. That’s a real slippery slope when you start letting people off from contractual terms because they didn’t read them or didn’t understand them.

    Rate this comment: Thumb up 0

  52. 59
    David Losh says:

    RE: Doug @ 23

    My comment was a reference to what has happened to this thread.

    Of course people should be aware of the sewer capacity charge, and you should let your agent’s Broker pay for all of it. It is one of my very pet peaves about Real Estate agents, who are supposed to know how this works, but don’t do the job.

    This shouldn’t have been a surprise, but it is, in more cases than there should be. It has been going on a very long time, so it should be a standard practice issue by now.

    Rate this comment: Thumb up 0

  53. 60
    David Losh says:

    RE: Kary L. Krismer @ 46

    sewer line charge, not uncommon.

    Rate this comment: Thumb up 0

  54. 61
    David Losh says:

    RE: Kary L. Krismer @ 58

    Many properties have already paid off the sewer capacity charge.

    Rate this comment: Thumb up 0

  55. 62
    phil says:

    Why did they do it this way? Because there where was no way in hell that current rate payers would pick up the huge tab for a bunch of late comers to the system.

    Your REA should have had this info available before you even made an offer.

    Rate this comment: Thumb up 0

  56. 63

    By David Losh @ 61:

    RE: Kary L. Krismer @ 58

    Many properties have already paid off the sewer capacity charge.

    It’s a charge paid over 15 years. It’s not based on the age of the house, but the time of the connection. That’s been made clear many times here. Not sure how my post 58 indicates that might not be the case.

    Do you think the life of a house is only 15 years?

    Rate this comment: Thumb up 0

  57. 64

    By phil @ 62:

    Your REA should have had this info available before you even made an offer.

    Not necessarily the amount, but an estimate of it, or at a minimum a brief description of the system. And where you think it might be zero, you should always disclose that it still might exist (e.g. the 1975 house connected in 2000.)

    Rate this comment: Thumb up 0

  58. 65
    Carey says:

    Sounds like something real estate agents should help buyers write into the purchase agreement. I know our agent had the builder/seller pay for our “sewer costs” prior to closing.
    I did not know at the time what she was talking about…Nov 2007 new home in King County.

    Rate this comment: Thumb up 0

  59. 66
    David Losh says:

    RE: Kary L. Krismer @ 63

    because you want the client? to know the specifics? or that they need to ask?

    That’s why this is an agency State. If you are an attorney you get get away with not being forth coming unless the client specifically asks.

    It can be paid at any time, in full, and in this case it’s $2K? What was the total due? where in the payment process is this property? You don’t know, but here you are.

    The agent’s Broker should pay.

    Rate this comment: Thumb up 0

  60. 67
    David Losh says:

    RE: Carey @ 65

    Exactly right of your agent, I have done the same, back in the day.

    Rate this comment: Thumb up 0

  61. 68

    RE: Carey @ 65 – That’s one of the ways that a builder can negotiate price without it being publicly telegraphed when the deed records. It’s sort of like doing free upgrades, but it’s cash.

    In a way though it’s sort of like paying points to pay down an interest rate. With points if you sell or refinance within the first few years, you lose most of the benefit of the points, and it likely cost you more money than what you got in benefit. With capacity charges it only benefits you fully if you keep the house a long time, because surprisingly you’re unlikely to get much more for it with the charge fully paid off. You should get more, but you’re unlikely to. I don’t think I recall a single listing which said: “Capacity charge fully paid.” Nor have I seen an appraisal which indicates a difference in value from the comps because the capacity charge was paid.

    Rate this comment: Thumb up 0

  62. 69

    By David Losh @ 66:

    RE: Kary L. Krismer @ 63

    because you want the client? to know the specifics? or that they need to ask?

    That’s why this is an agency State. If you are an attorney you get get away with not being forth coming unless the client specifically asks.

    It can be paid at any time, in full, and in this case it’s $2K? What was the total due? where in the payment process is this property? You don’t know, but here you are.

    The agent’s Broker should pay.

    The first three questions have nothing at all to do with the fact that the fee is sometimes paid off. But in any case I’ve said repeatedly that the agent needs to explain the situation and the choice at the time of signing. What is your problem?

    Agency has nothing to do with it, and attorneys are not held to a lower standard. In fact, in filling out the forms agents are held to the standard of an attorney.

    I don’t understand the second to last paragraph.

    As to the third, the agent should arguably pay if they were negligent filling out the form or in bringing the choice to the client’s attention. That this was a short sale, however, makes that less certain because the bank almost certainly is not going to allow the charge to be paid, and the seller either won’t want to or can’t. Clearly you don’t understand real estate.

    Rate this comment: Thumb up 0

  63. 70
    Lily says:

    By Basho @ 54:

    Accommodating new development was the sole reason for the expansion of the King County Sewage system. With more efficient fixtures and appliances, water use per household has generally been decreasing. While the capacity charge is not perfect, it is certainly more fair than asking all ratepayers to pay for projects that principally benefit new connections.

    Should we have new comers to King County and parents of new born babies pay for more frequent bus services, since additional bus service would not be necessary if there was no population increase? No, we expect the additional tax revenue will cover it eventually.

    I can understand charging for the last mile hookup, all home owners paid for that when the house was built, but charging only new developments for upgrades to treatment plants? I suppose it is fair if previous surcharges have fully paid for all existing infrastructure. I doubt that’s the case.

    Rate this comment: Thumb up 0

  64. 71

    By Lily @ 70:

    I can understand charging for the last mile hookup, all home owners paid for that when the house was built, but charging only new developments for upgrades to treatment plants? I suppose it is fair if previous surcharges have fully paid for all existing infrastructure. I doubt that’s the case.

    Think if it this way. The new plants wouldn’t be necessary, by and large, but for the new connections. Each connection charge goes toward building the new plant which either is necessary, or will be necessary due to the increased connections, but wouldn’t have been necessary otherwise.

    As to the bus analogy, you can’t easily determine who is new and who is old. That’s not the case with sewer connections.

    Rate this comment: Thumb up 0

  65. 72
    David Losh says:

    RE: Lily @ 70

    New development was meant to pay for infrastructure. If you put in 200 homes on a one lane road that serviced 12 homes, then the developer was meant to pay for that.

    It has gotten lost in translation because the costs are just passed on to the consumer. The capacity charge was the same idea for treatment plants that had capacity for rural areas that are now suburban.

    Carkeek is mentioned in this debate a lot, because as the area of Broadview was developed the water run off also over loaded the sewer treatment facility. In Broadview there isn’t a specific developer, or development to collect from. In South Everett, on the other hand, builder developers are ripe targets.

    Rate this comment: Thumb up 0

  66. 73
    David Losh says:

    RE: Kary L. Krismer @ 69

    The agent had the responsibility to ask, and inform. Who pulled the title report? Was it on the title report? Did the agent ask if the sewer capacity charge was paid off?

    A short sale is no excuse.

    The agent’s Broker should pay. They have a client who has asked for $2K they were unaware of. These buyers seem bright enough, but you think it’s a slippery slope for Brokerages to take responsibility.

    Rate this comment: Thumb up 0

  67. 74
    David Losh says:

    The point is, my point is, that you should be asking more questions.

    Rate this comment: Thumb up 0

  68. 75

    By David Losh @ 73:

    RE: Kary L. Krismer @ 69 -Who pulled the title report? Was it on the title report?

    Have you read any of this thread? The only thing on the title report is that they don’t cover these charges, and how to contact King County to find out if anything is owed. Reading that title report is yet another way the buyer would discover the fee.

    You either are or have been a real estate agent. Why don’t you know that?

    Rate this comment: Thumb up 0

  69. 76

    By David Losh @ 73:

    A short sale is no excuse.

    It’s no excuse as to informing the buyer about the possible charge. It’s very unlikely that knowledge would have lead to a different result. Presumably the buyer already made the lowest offer they thought the bank would accept, or the bank came back with a higher number than offered. Very unlikely the bank would allow the capacity charge to be paid or that the seller would pay it.

    Let’s put it this way. Let’s say you were negligent and caused an accident that killed someone. If that someone was on their way to see a doctor for assisted suicide to be done that day, the civil damages you would have to pay for that death would likely be quite low, because they were going to be dead anyway. Here the capacity charge was unlikely to be paid even if the buyer had been informed of it. So the result would likely have been the same, so the agent arguably isn’t responsible.

    Rate this comment: Thumb up 0

  70. 77
    mukoh says:

    RE: ARDELL @ 39 – Ardell latecomers paid back to the developer have not existed since the early 90s. They are either collected up front, or paid to the utility district at a per foot charge later by the home owner connecting to an already put in sewer main at a later date. I ended up charging 11 people out 12 upfront $7500 per stub, and included in the sewer main Ts per each one. :) It all ended up cheaper for them than paying $14k frontage fee to Alderwood W&S later.

    Rate this comment: Thumb up 0

  71. 78

    By David Losh @ 73:

    < These buyers seem bright enough, but you think it's a slippery slope for Brokerages to take responsibility.

    No, I said it was a slippery slope for buyers to be let off for not reading or understanding their contracts.

    Here assuming the standard forms were used:

    Page 1 of form 21 brought this up.
    Page 3 of form 21 brought this up.
    Form 17, if given, brought this up.
    The title report almost certainly brought this up.

    At what point can the buyer no longer say: “I didn’t know?” That’s a tough question, which is why I say it’s a slippery slope.

    All that said, the agent should have brought it up too. That does not mean though, that they should have to pay all or even part.

    Rate this comment: Thumb up 0

  72. 79
    Basho says:

    “Should we have new comers to King County and parents of new born babies pay for more frequent bus services, since additional bus service would not be necessary if there was no population increase? No, we expect the additional tax revenue will cover it eventually.”

    It’s a completely different situation. There is no minimum standard of bus service. More people in King County does not mean more transit service needs to be offered.

    More households hooking up to a sewage system means more sewage will be entering the system. As a society, we’ve decided that all sewage needs to be treated before being discharged into the environment. More sewage entering the system means that more treatment capacity is required to avoid discharging waste untreated into the environment. More treatment capacity costs money. Who should pay for it? Ideally, the people who’s actions resulted in the need for it.

    Not to mention, the additional sewage capacity was pre-condition to the new household existing in the first place. Without the additional capacity, no building permit would have been issued.

    Rate this comment: Thumb up 0

  73. 80
    mukoh says:

    RE: Basho @ 79 – Earthies do not like the sewer treated, they like it natural!.

    Rate this comment: Thumb up 0

  74. 81
    David Losh says:

    It makes no difference to this thread, your comments, or the end result.

    This is another case, another day, of multiple comments of opinions contrary to the workings of the Real Estate industry.

    The cleint was uninformed. The Broker should pay even if it is only good business to pay.

    Rate this comment: Thumb up 0

  75. 82
    David Losh says:

    RE: Kary L. Krismer @ 75RE: David Losh @ 73RE: Kary L. Krismer @ 78

    Wait, I thought you said that it wasn’t on the title report? but then comment that “The title report almost certainly brought this up.”

    Rate this comment: Thumb up 0

  76. 83
    James Baker says:

    This situation happened to me, too. My sudden bill was for a ‘mere’ $800, though. I purchased a short sale where the previous owner had stopped paying King County almost two years prior to the sale. It was not disclosed by the sellers to their agent, was not on the Form 17, was not caught by my agent, and was not caught by escrow. I didn’t hear about this program at all, from anyone, until the bill showed up months later. This bill is not something that shows up anywhere automatically – someone has to basically ask King County what its status is.
    The (generally quite polite and helpful!) folks at the King County Wastewater Capacity Charge program told me that they would in no way go after the previous owner for their unpaid bill. I had thought, after reading the RC carefully, that this was within their power, but they informed me that the county prosecutor had told them that they did not have the authority to do that. They pointed to escrow as the most responsible party for failing to inquire with the county about the capacity charge.
    Escrow acknowledged their fault but refused to pay. My agent was not a King County resident and didn’t deserve to pay. Seller’s agent refused to pay, saying he was deceived by seller. Seller was, of course, long gone. The county wasn’t going to do a darn thing except hold me responsible for the previous owner’s missed payments. Well, $800 was a lot easier than trying to sue somebody…

    Rate this comment: Thumb up 0

  77. 84
    ARDELL says:

    RE: Kary L. Krismer @ 78

    Kary, there is no disclosure without an amount. There is no “meeting of the minds” without an amount. You can’t say a home buyer was “informed” and agreed to pay something because of a check box and some boilerplate language that appears exactly the same way in contracts for houses that have a $93,000 charge as it does in another that has none at all.

    The system favors sellers as no one would ever expect a seller to agree to pay all of a buyer’s closing costs without a stated dollar limit. No one would expect a seller to agree to pay an excise tax of some undetermined amount. Yet you seem to think a buyer agreeing to any and all sewer assessments, without knowing if that number is zero or $93,000 at time of offer, is just honky dory. Don’t you see the gross unfairness in that kind of thinking?

    Again, I’m not saying you are legally or technically wrong. But that you are right, and the buyer is asked to do something no one would ever tolerate if it were a seller vs a buyer, is just so wrong that it stinks to high heaven.

    A contract only conveys a meeting of the minds. Without a list of which assessments a buyer is agreeing to pay, and a dollar amount for each item on the lust, you really can’t say the buyer agreed to pay “it”.

    Rate this comment: Thumb up 0

  78. 85
    S-crow says:

    Local title reports show nothing other than notations that there are “potential assessments.” I highly doubt, based upon my experience, that the Title report is read thoroughly by the principal parties to the sale including the agents involved and understand it’s language or limitations.

    For example, I just solved a title issue on a report that a loan officer had in their possession for a month and a half and I received last week and now they are belly-aching about why their deal can’t be closed right away. If they understood the contents of the title report and how it impacts their transaction they would not be panicking at the 12th hour because their lock is expiring and had it resolved within a week or so of the report being generated.

    As a side note: In regards to short sales, it always mystifies me when you have a title report that is messy in terms of liens or judgments and agents give up on it or the transaction before it even starts. It is a gold mine if you have a escrow firm that is proactive in knowing what to do or assessing whether or not the issues are solvable.

    S-crow

    Rate this comment: Thumb up 0

  79. 86
    Purple says:

    Is this capacity charge deductible from federal taxes?

    Rate this comment: Thumb up 0

  80. 87
    T. Y. Lee says:

    Well, balls! Looks like I’m on the hook for a sewer capacity charge (just asked my realtor) but nobody even knows how much it is.

    I totally don’t feel like I’m being screwed. At all. (/sarcasm)

    Rate this comment: Thumb up 0

  81. 88
    T. Y. Lee says:

    RE: Purple @ 86 – Not sure, but the kingcountygov site did mention this: “At any time during the 15-year duration of the charge, you may pay the remaining balance in one lump sum at a discount. If you include the payoff amount in your mortgage, it might provide a tax advantage.”
    But I personally have no idea what that even means. I did send an email to my realtor, to see if she can clarify some of this for me, since I am under contract for a new house and will be responsible for this charge.

    Rate this comment: Thumb up 0

  82. 89
    StillRenting says:

    Thanks for the post, Tim & Doug! This is really helpful information for buyers.

    Are there any more “hidden” costs or fees that may not be fully disclosed in the contracts that buyers should be asking about? I don’t really consider anything that doesn’t list an actual amount owed on a document you sign to be fully disclosed in the paperwork (i.e., a checkbox saying one party or the other is responsible for some unspecified cost isn’t full disclosure, in my opinion).

    Rate this comment: Thumb up 0

  83. 90

    By David Losh @ 82:

    RE: Kary L. Krismer @ 75RE: David Losh @ 73RE: Kary L. Krismer @ 78

    Wait, I thought you said that it wasn’t on the title report? but then comment that “The title report almost certainly brought this up.”

    Read post 8. The preliminary commitment almost certainly said it wasn’t something they cover. In the example I give there, they tell the buyer how to find out if there is anything owing.

    Rate this comment: Thumb up 0

  84. 91

    By James Baker @ 83:

    The (generally quite polite and helpful!) folks at the King County Wastewater Capacity Charge program told me that they would in no way go after the previous owner for their unpaid bill. I had thought, after reading the RC carefully, that this was within their power, but they informed me that the county prosecutor had told them that they did not have the authority to do that. They pointed to escrow as the most responsible party for failing to inquire with the county about the capacity charge..

    The charge is “in rem” only, per the second statutory link I posted above. That means it’s a claim against the property only, there is no personal liability. If you don’t pay you can lose the property, but they cannot get a judgment against you to say garnish your wages.

    If your contract said you would assume the charge, there’s no reason escrow would have to check. Tim above noted his office always checks. I think that’s going above and beyond what an escrow is required to do (and would question whether it leads to more or less liability for his firm).

    Rate this comment: Thumb up 0

  85. 92

    By ARDELL @ 84:

    RE: Kary L. Krismer @ 78 -Kary, there is no disclosure without an amount. There is no “meeting of the minds” without an amount.

    Incorrect on both counts. As to the second, a unilateral mistake does not prevent a meeting of the minds. And in any case, the contract has already been fully executed at this point, so that’s rather irrelevant.

    As to the rest of your post have I said that the disclosure shouldn’t be better? No. Did I complain above that King County’s system wasn’t sufficiently automated to have access to this information? Yes. There is clearly room for improvement, especially if you have agents like David who don’t understand the system and can’t properly warn their clients about what is going on. That’s an entirely different issue, because that’s not the world we live in.

    In the world we live in the agent would be at fault if the situation wasn’t adequately explained, and the buyer would be at fault if they ignored what was likely 4 separate instances where the capacity charge was mentioned, and one of those was a check box indicating that the buyer was assuming that charge! Shouldn’t that raise some flags for a buyer?

    Rate this comment: Thumb up 0

  86. 93

    By S-crow @ 85:

    Local title reports show nothing other than notations that there are “potential assessments.” I highly doubt, based upon my experience, that the Title report is read thoroughly by the principal parties to the sale including the agents involved and understand it’s language or limitations.

    For example, I just solved a title issue on a report that a loan officer had in their possession for a month and a half and I received last week and now they are belly-aching about why their deal can’t be closed right away. If they understood the contents of the title report and how it impacts their transaction they would not be panicking at the 12th hour because their lock is expiring and had it resolved within a week or so of the report being generated.

    I would agree with a lot of that. For some reason agents find preliminary commitments confusing, and even the title reps often don’t understand.

    I once reviewed a file of another agent where they had three listings from the same owner. The 2 of the 3 title reports had errors in them, which is part of the reason I never use that unnamed title company, but each of them had information indicating that the property could not be sold absent a short sale or other agreement. This was back before short sales were at all common, and I think before the NWMLS had a category for them. There were also updates to the commitments which made the transactions either more difficult, or impossible (e.g. a lis pendens). I’m not even sure the agent ever read any of this information provided.

    Even worse, there are still agents that list a property without getting a title report until the point an offer comes in!

    Rate this comment: Thumb up 0

  87. 94

    By Purple @ 86:

    Is this capacity charge deductible from federal taxes?

    To do that I think it would need to be considered a tax, and I’m not sure it would be. My guess is it gets added to your tax basis, reducing your gain when you sell. If it were a business property you might be able to deduct the periodic payments. Interesting question.

    Rate this comment: Thumb up 0

  88. 95

    By StillRenting @ 89:

    Thanks for the post, Tim & Doug! This is really helpful information for buyers.

    Are there any more “hidden” costs or fees that may not be fully disclosed in the contracts that buyers should be asking about? I don’t really consider anything that doesn’t list an actual amount owed on a document you sign to be fully disclosed in the paperwork (i.e., a checkbox saying one party or the other is responsible for some unspecified cost isn’t full disclosure, in my opinion).

    As I noted, that should at least raise some flags!

    But to answer your question, the big one that comes to mind is mechanics liens. Those can be for thousands of dollars and might not be recorded at the time of the transaction. The best way to protect yourself from those is to get the “homeowners” level of title insurance, as I’ve discussed before. That means on Form 22D not checking either box of paragraph 2. As I noted above, an agent is apparently being sued for checking the first box of that form, after something like a mechanics lien popped up after closing.

    The other big thing that comes to mind would be a future special assessment on a condo. There should be information that would at least give you a clue that was likely in the Resale Certificate from the condo association.

    Rate this comment: Thumb up 0

  89. 97
    David Losh says:

    RE: S-crow @ 85

    One thing I have never seen discussed is the importance of a good title representative. It may be that most title reps are just sales people taking orders, but some read the report, discuss it with the plant, and give the agent an opinion.

    The title report can make, or break, a deal, yet it seems it gets over looked.

    Rate this comment: Thumb up 0

  90. 98
    David Losh says:

    RE: Doug @ 96

    I have always thought the developer should pay, and roll it into the cost. It seems very under handed to me, but again, your agent should pay, it should have been discussed.

    Rate this comment: Thumb up 0

  91. 99
    David Losh says:

    RE: Kary L. Krismer @ 92

    Whoa, hold on, this is obviously another point of Real Estate you are attempting to figure out, but you are here dispensing advice.

    That is a great concern of mine about the internet.

    Ardell has once again given you good information that you will ignore, and go on like it should all be different some how.

    “agents like David who don’t understand the system ” you make comments like this so some one will engage you and another twenty comments, best of luck with that.

    Rate this comment: Thumb up 0

  92. 100

    By Doug @ 96:

    I wanted to simply raise the awareness that home-buyers should be really careful when buying a new home. $52 a month for 15 years isn’t chump change.

    I would agree, and I think it served that purpose very well. I have to say I’m shocked that some agents don’t discuss this issue better at the time of signing the contract.

    Somewhat related, we recently had a client buying a property on septic, and there we gave them not only the capacity charge information, but also the following charges that they would have to pay if and when their septic system failed:

    Special Connection Charge of $6850.80
    General Facility Charge of $2900.00
    Side Sewer Permit of $150.00

    And we obtained a very rough estimate of the cost of running the pipe to the connection.

    That was all for a septic system that appeared to be perfectly fine in an area where two separate septic people said the soil in that area was very good for drain fields. But someday they may have to connect, so we got them the information on the cost.

    Rate this comment: Thumb up 0

  93. 101

    By David Losh @ 99:

    “agents like David who donâ��t understand the system ” you make comments like this so some one will engage you and another twenty comments, best of luck with that.

    You clearly don’t understand the system, as your comments about title reports indicate. But despite your lack of knowledge of the topic being discussed, that doesn’t stop you from claiming that the brokerage should pay the $2,000.00. That’s why I referenced you as an example of an agent who doesn’t understand the system.

    Rate this comment: Thumb up 0

  94. 102

    By David Losh @ 97:

    RE: S-crow @ 85

    One thing I have never seen discussed is the importance of a good title representative. It may be that most title reps are just sales people taking orders, but some read the report, discuss it with the plant, and give the agent an opinion.

    The title report can make, or break, a deal, yet it seems it gets over looked.

    Title reps are for taking orders and perhaps putting a bit of pressure on the title company if you can’t get the decision you want.

    If an agent has a question about the title policy, they should call one of the title officers indicated on the title report. Going through the title rep would only lead to misunderstandings. It’s adding a step to communications which is completely unnecessary.

    Rate this comment: Thumb up 0

  95. 103
    Doug says:

    RE: ARDELL @ 84

    Exactly. I’m sure the title report made mention that I had to pay all applicable fees, but this charge was never brought up. Other fees and outstanding debts WERE.
    Again, I thought I had checked everything out. I guess I’m a rube for not checking out the utility practices of the neighboring county.

    I don’t think many people would. I’m not arguing that I’m not legally obligated to pay this bill, but I’d like more people to be aware of it.

    I think, if nothing else, that this thread has exposed a lot of confusion on the matter. Confusion that could have been easily avoided if the law had been written differently :-/

    Rate this comment: Thumb up 0

  96. 104

    A real estate agent is supposed to have more knowledge about these things than your garden variety home buyer. That’s why you hire them. Absolutely, short sales are more complicated than regular home sales, and real estate agents are human and doo miss things.
    But I think the agent in this case had responsibility in finding out and disclosing the connection charge. I don’t care how “nice” the agent was, but if they were offering me to cover half that cost, I would take it. You may need that money down the road.

    Rate this comment: Thumb up 0

  97. 105

    I think I just realized by Tim (the escrow) obtains the capacity charges on all transactions. The past due items are supposed to be paid by the seller, regardless of which box is checked. If the escrow doesn’t check for the charges, then they wouldn’t be paying something that is supposed to be paid out of the sales proceeds.

    Rate this comment: Thumb up 0

  98. 106
    Doug says:

    RE: Ira Sacharoff @ 104

    I may do that, Ira. Originally I thought this should be the onus of the title company, but It looks like I was wrong.

    Thanks, everyone, for the wise counsel.

    Rate this comment: Thumb up 0

  99. 107

    RE: Doug @ 106 – FWIW, I think you’ve behaved very well here and been very understanding of the situation, incredibly well considering the way it was dropped on you. And again, I think this is an important issue for buyers to understand, so a good topic here.

    I’m currently working on additional written disclosure to give to my buyer clients, since it is an issue that is somewhat difficult to understand.

    Rate this comment: Thumb up 0

  100. 108
    Sweet Pea says:

    Nothing like another land mine to make me continue my procrastination of jumping in the water with the sharks.

    I propose buyers get together and dream up ways to make the process as shady and distasteful for sellers. Buyers clearly need more options for bleeding everyone else as dry as possible.

    Rate this comment: Thumb up 0

  101. 109

    Doug,

    Were you provided a “Form 17″, “Washington State Property Disclosure” form?

    If so, on question number 3 SEWER/ON-SITE SEWAGE SYSTEM *C – “Is the property subject to any sewage system fees or charges in addition to those covered in your regularly billed sewer or on-site sewer system maintenance service?

    What was answered for that question? The answer choices on the form are: Yes, No, I don’t know.

    Rate this comment: Thumb up 0

  102. 110
    Sparky says:

    I’m struggling with the idea that the capacity charge is fair, as you wouldn’t want existing homes to pay for the added capacity. The older infrastructure must need maintainence to keep it running, upgraded to meet newer requirements, etc. If new construction has paid a fee specifically to build new capacity, following a similar line of reasoning, shouldn’t their rates be lower, as it’s not fair to make them pay to upgrade the old stuff, since they’ve paid a fee specifically to build the infrastructure they require? The initial capacity was funded through regular sewage fees, no? Why suddenly (well, in 1990) add a fee for the central infrastructure? It seems like the older houses get a free ride, as their rates aren’t any higher and they never had to pay that fee.

    I can see a charge to make the physical connection into the system, but the capacity charge strikes me as pretty sketchy. With added capacity comes additional revenue, as the new homeowners will be paying sewage bills. I don’t really see how that’s unfair to the older construction. Anyway, just my opinion, and obviously has no impact on how the world actually works…

    Rate this comment: Thumb up 0

  103. 111
    Doug says:

    RE: Sparky @ 110

    Well, you certainly have a good idea of how utilities work (or are supposed to work at least)

    Hey, by the ‘new construction pays for new capacity’ standards, we should just charge thousands of dollars for the police to respond to an emergency, just so the rest of the populace can enjoy slightly lower taxes.

    Rate this comment: Thumb up 0

  104. 112
    ARDELL says:

    RE: Jamie @ 42

    On an airplane heading back to Seattle. I was hoping Kary would pick this up as it references the Law vs actual property issues. Your first sentence is not true in WA as it is in most other States. For some reason WA elected to downgrade Agent and Brokerage duties from Fiducuary level of care to merely Statutory duties. To add insult to injury…they then try to convince everyone there is no difference.

    Rate this comment: Thumb up 0

  105. 113
    Doug says:

    RE: Julie Lyda, RE/MAX Northwest Realtors @ 109

    i don’t have that form now, and couldn’t attest to whether I did at signing.

    Things are being discussed, and I’ll know more in time.

    Rate this comment: Thumb up 0

  106. 114
    ARDELL says:

    RE: Kary L. Krismer @ 7

    Why don’t you post that publicly so SB readers everywhere can benefit from the expanded knowledge base. Why brag about doing that privately vs sharing it with this topic in the comments for broad benefit?

    Not for me of course. That would be ridiculous. But why spend so much time day after day here only to say you have something impotent to add on this topic…but you re only going to tell one guy…in secret. :(

    Rate this comment: Thumb up 0

  107. 115

    By Sparky @ 10:

    I’m struggling with the idea that the capacity charge is fair, as you wouldn’t want existing homes to pay for the added capacity. The older infrastructure must need maintainence to keep it running, upgraded to meet newer requirements, etc. If new construction has paid a fee specifically to build new capacity, following a similar line of reasoning, shouldn’t their rates be lower, as it’s not fair to make them pay to upgrade the old stuff, since they’ve paid a fee specifically to build the infrastructure they require?

    I think that may be an issue we need more information on. Don’t forget there are individual sewer districts, and I suspect that they take care of their own pipes, so this might not involve local pipes at all! Note above I set out what the charges were to connect to one local district, and one of those fees was significant (5-6k without looking). That might be the cost for the local pipe.

    Rate this comment: Thumb up 0

  108. 116

    By ARDELL @ 12:

    RE: Jamie @ 42

    On an airplane heading back to Seattle. I was hoping Kary would pick this up as it references the Law vs actual property issues. Your first sentence is not true in WA as it is in most other States. For some reason WA elected to downgrade Agent and Brokerage duties from Fiducuary level of care to merely Statutory duties. To add insult to injury…they then try to convince everyone there is no difference.

    That’s not so clear. There’s a case pending before the Supreme Court that deals with the issue of whether agents still have fiduciary duties. I don’t think that one has been decided yet.

    My point was slightly different. I don’t think you need to prove a breach of fiduciary duty to recover.

    Rate this comment: Thumb up 0

  109. 117

    By ARDELL @ 14:

    RE: Kary L. Krismer @ 7

    Why don’t you post that publicly so SB readers everywhere can benefit from the expanded knowledge base. Why brag about doing that privately vs sharing it with this topic in the comments for broad benefit?

    Not for me of course. That would be ridiculous. But why spend so much time day after day here only to say you have something impotent to add on this topic…but you re only going to tell one guy…in secret. :(

    You must be flying first class with free liquor! WTF are you talking about? That post was about a link to a map that shows the service area of the King County system. I did post that link publicly here, and mentioned that I’d sent it to two agents in the past 30 days. That last point was made to show that these issues come up between agents all the time, and that this is in fact a topic agents should be aware of (meaning that it’s something Doug’s agent should have brought up).

    Other than that, I have no idea what you’re saying.

    Rate this comment: Thumb up 0

  110. 118
    Rob says:

    RE: Sparky @ 10
    You’re right and Doug is right. The capacity charge makes no sense and doesn’t reflect the way any other utility works or should work. Sure, a new connection is used exclusively by the new construction and should be paid for by either developer (preferably) or owner, but capacity is used by everyone and should be charged equally to everyone. It is a system that has a certain operating cost. Essentially, some customers are being given a discount because they got in early.

    It’s not like the need for additional capacity is just a result of new construction, either. More people in a household or a new Taco Bell in the neighborhood boosts the need for capacity, as well.

    Rate this comment: Thumb up 0

  111. 119
    Sparky says:

    RE: Kary L. Krismer @ 115 – I’ll definitely grant you that I don’t know anything about these charges. I’m just a dirty renter, and I’d never heard of this before this thread, and really never considered who pays for what bits of the utility infrastructure. I give a bunch of money to my landlord, and when I flush my toilet it goes somewhere…

    Just looking at the King County FAQ on the issue, the capacity charge seems like it covers the sort of infrastructure projects I would have expected the regular revenues to pay for. I don’t know what a “Southwest Interceptor” is, but it doesn’t seem like this is just about the pipes. If local areas have to pay for pipes (LIDs, I think you called them) to be added or repaired, that might make sense. You’re paying for something that is more directly for your use, and it doesn’t really have anything to do with when it’s built – if the pipe breaks, you’ll pay to repair it.

    The way I’m understanding it, though, this capacity charge is more for the central infrastructure stuff that seems equally shared, and is sort of the point of the regular fees? More users require more infrastructure, but also provide more revenue, no? It seems like this is a way to keep regular sewage fees artifically low by adding a surcharge to a certain subset of customers.

    What is the money used for?

    King County’s wastewater treatment system protects public health and the environment by treating wastewater before recycling it or releasing it into Puget Sound. Increasing demand on the regional sewage treatment system has meant building new treatment facilities and expanding capacity of the current system. Examples of this needed expansion include the new Brightwater Treatment Plant in Woodinville, expansion of the Bellevue Pump Station, and the Southwest Interceptor project in the Kent-Auburn area. View more projects under construction.

    Rate this comment: Thumb up 0

  112. 120

    By Sparky @ 118:

    The way I’m understanding it, though, this capacity charge is more for the central infrastructure stuff that seems equally shared, and is sort of the point of the regular fees? More users require more infrastructure, but also provide more revenue, no? It seems like this is a way to keep regular sewage fees artifically low by adding a surcharge to a certain subset of customers.

    The statute I cited above says: “The capacity charge shall be based upon the cost of the sewage facilities’ excess capacity that is necessary to provide sewerage treatment for new users to the system.” That seems like a really odd way of saying it. If say Brightwater currently processes 5MGD, but has the capacity to do 8MGD, does that mean the new users only pay for 3/8ths of Brightwater?

    Again I think more information is necessary to judge the fairness, but I don’t have a big problem having new connections pay for upgrades necessary to handle more capacity.

    Rate this comment: Thumb up 0

  113. 121
    Sparky says:

    By Kary L. Krismer @ 19:

    The statute I cited above says: “The capacity charge shall be based upon the cost of the sewage facilities’ excess capacity that is necessary to provide sewerage treatment for new users to the system.” That seems like a really odd way of saying it. If say Brightwater currently processes 5MGD, but has the capacity to do 8MGD, does that mean the new users only pay for 3/8ths of Brightwater?

    Again I think more information is necessary to judge the fairness, but I don’t have a big problem having new connections pay for upgrades necessary to handle more capacity.

    Again from King County:

    How does Brightwater impact sewer rates?
    By 2030, the revenue from the capacity charge and rate payments of newly connecting customers will cover approximately 95 percent of the incurred borrowing costs for Brightwater.

    It just seems to me that new users are paying for both the new and old capacity (by paying the ~$50 capacity charge, and the ~$30 regular charge).

    Rate this comment: Thumb up 0

  114. 122
    David Losh says:

    RE: Kary L. Krismer @ 101

    The broker should pay. This is a standard Real Estate issue, and has been since at least 1984, which is the first time I wrote a new construction Earnst Money Agreement. The sewer capacity charge, as Ardell explained to you, was lumped into a complex set of infrastructure obligations that builders passed onto the new home owners.

    The broker should have at least been aware of the issue.

    It’s another one of those themes I keep bringing up. Real Estate agents should be better educated about doing short sales, then get some experience doing them, before they “write ‘em up.” The Broker should have been involved, and managed his Brokers.

    Rate this comment: Thumb up 0

  115. 123
    David Losh says:

    RE: Kary L. Krismer @ 2

    Your title rep has a vested interest in keeping the agent’s business; the title officer doesn’t know you from Adam, or Doug, in this case.

    Your title rep should have a good working relationship with the title officer who doesn’t know you from Adam.

    So the title rep is in the business of keeping working relationships rather than some agent making random phone calls.

    The function of a good agent is to have these kinds of relationships in place, mortgage, title, escrow, and the like.

    Rate this comment: Thumb up 0

  116. 124
    David Losh says:

    RE: Rob @ 18

    You stated that very well, especially about the Taco Bell, or retailers that serve the new community. That is essentially what we are discussing, new communities.

    Heading out to Monroe, or Woodenville, there was nothing but trees, and brush, then BAM there were a thousand homes, like Issauquah Highlands.

    The people who lived out there for decades originally moved out to the suburbs that are now more like urban areas. The infrastructure, and capacity charges do benefit every one, and that is a good way to look at it.

    Rate this comment: Thumb up 0

  117. 125
    Basho says:

    I don’t understand why some people can’t grasp why the capacity charge program is far more reasonable than simply increasing sewage rates for all households.

    The capacity charge program is nothing more than an attempt to match costs and benefits. The beneficiaries of new capacity are those whose structures would not exist without the system expansion (due to inability to obtain building permits). I will say it again. The only reason the system was expanded so that your new structure could be built. Why should you not pay for it?

    Rate this comment: Thumb up 0

  118. 126

    By David Losh @ 122:

    RE: Kary L. Krismer @ 101 – The broker should pay. This is a standard Real Estate issue, and has been since at least 1984, which is the first time I wrote a new construction Earnst Money Agreement. The sewer capacity charge, as Ardell explained to you, was lumped into a complex set of infrastructure obligations that builders passed onto the new home owners.

    First, I suspect your designated broker wouldn’t be too happy with you taking a position that an agent should pay regardless of damages. That’s basically what you’re saying. Go back and read the analogy of killing someone with your car.

    Second, the sentence I highlighted is completely wrong! That’s why I don’t listen to the stuff you think I should be listening to. The program started in 1990.

    http://www.kingcounty.gov/environment/wastewater/capacitycharge.aspx

    The builders don’t pass it on to buyers. It’s billed directly by the county. And it doesn’t have to be a new development. Only a new connection to the sewer system. Basically everything you said in that sentence is incorrect! Get a clue. Read this thread. Read the links in this thread. Quit spouting off with a bunch of stupid nonsense.

    Rate this comment: Thumb up 0

  119. 127

    By David Losh @ 123:

    RE: Kary L. Krismer @ 2 – Your title rep has a vested interest in keeping the agent’s business; the title officer doesn’t know you from Adam, or Doug, in this case.

    But the title rep likely doesn’t know the correct answer! Why would you try to deal with a problem by using an intermediary that likely doesn’t know the answer? Answer: You only would if you don’t know squat and don’t have a clue that your title rep doesn’t know the answer.

    I’ve known some very good title reps, but I would never ask them for information on a title report. When I’ve seen them try to give an answer to others they often fail miserably.

    Rate this comment: Thumb up 0

  120. 128
    David Losh says:

    RE: Basho @ 125

    There was an article today about the cost of new construction. The cost keeps going up, and the value is added to existing properties. So when a hundred houses in Woodenville are surrounded by a thousand new houses, the value of the existing structures goes up also.

    We might quible that there is no new value, but there is a revitalization of the community.

    Government like this because they get more revenue so it’s hard to fight.

    Rate this comment: Thumb up 0

  121. 129
    David Losh says:

    RE: Kary L. Krismer @ 26

    Snohomish County.

    Rate this comment: Thumb up 0

  122. 130
    ARDELL says:

    RE: Kary L. Krismer @ 17

    You’ll have to talk to The Tim about why 107 shows up as 7 when I hit the reply button. I was talking about the last line of your 107…not your 7. If you click the link of reference in my 114 you would see that…or note that several others appear that way as well once the comments run into a 2nd page. Not sure why some do and some don’t.

    Rate this comment: Thumb up 0

  123. 131
    David Losh says:

    RE: Kary L. Krismer @ 27

    The title rep is the one who has the relationship with the plant, the research. They can spend a day doing research while I do other things.

    Now why would the title officer stop to give you a quick answer?

    Rate this comment: Thumb up 0

  124. 132
    David Losh says:

    RE: ARDELL @ 30

    Because that would be the party of the second part.

    Let me handle Kary. You did a great job giving Kary good, solid information, but this has gotten to be personal.

    Rate this comment: Thumb up 0

  125. 133
    wreckingbull says:

    RE: Basho @ 125 – They can’t grasp it because a notion of a capacity charge for SHARED infrastructure is a ridiculous concept. We are not talking about the cost of laying new lines to new developments. This capacity charge is nothing more than a way to make up for revenue shortfalls. Do some research on the history of Brightwater and you can get a good taste of what government disfunction looks like.

    Rate this comment: Thumb up 0

  126. 134
    JC says:

    RE: Kary L. Krismer @ 27

    I’m in contract negotiations for a short sale in snohomish county. In the prelim title report I see an entry stating “LIABILITY FOR METRO SEWER CAPACITY SURCHARGES”.

    I have a question or two.

    I have conflicting reports about whether this house has been connected to sewer or still using the septic it was built with. Is it possible that King County can charge a property with Capacity Surcharges if its using a septic system?

    Also my gut tells me that if this was a bill the seller may not have been paying it. Is there a way to see if and by how much this bill could be in arrears?

    Thanks

    Rate this comment: Thumb up 0

  127. 135
    ChefJoe says:

    King County’s policy of “Growth should pay for growth” is largely why all the new construction requiring new sewer hookups pays for brightwater’s added capacity. Blame all the tax-weary establishment for passing ordinances that they don’t want to pay for new homes.

    http://www.ecy.wa.gov/programs/wq/permits/permit_pdfs/brightwaterWWTP/UA_Brightwater%20Treatment%20Plant.pdf

    6.3 Project Financing
    For purposes of analysis, rate and financing evaluations were based on cost estimates developed during November 2003 for the Brightwater Regional Wastewater Treatment System (King County, 2003a).
    In adopting the RWSP, the King County Council included recommendations that defined the Brightwater program and specific policies related to financing (King County, 1997). The policies that apply to the funding of Brightwater were originally outlined in King County Ordinance No. 13680, Section 16, and amended by King County Ordinance No. 14219, Section 3. With respect to the RWSP, the essence of these policies is that “growth should pay for growth.” Through these policies, customers representing new connections to the wastewater system will pay for the cost of expanding capacity through the combined revenues of their monthly sewer rate and capacity charge. The capacity charge is a monthly fee that is assessed to all customers—residential, commercial, and industrial newly connecting to the County wastewater system. Newly connecting customers have the option to pay the County biannually over 15 years, or to pay an upfront charge that represents a discounted value (currently 5.5 percent) of the 15 years of biannual payments.
    Because the Brightwater facilities are being sized to serve long-term service area growth through 2030, by definition the accumulated capacity charge fees alone will not be adequate within the construction time frame to fully fund the 2010 facilities construction. Therefore, the County will fund the capital portion of the cost through a combination of capacity charges, a portion of the annual revenue from the monthly sewer service rate, the sale of new revenue bonds, and the potential use of State Revolving Fund and other low-interest loans. Thus, the County will be paying the cost to build Brightwater for more than 30 years after construction is completed.

    Rate this comment: Thumb up 0

  128. 136

    By ARDELL @ 30:

    RE: Kary L. Krismer @ 17

    You’ll have to talk to The Tim about why 107 shows up as 7 when I hit the reply button. I was talking about the last line of your 107…not your 7. If you click the link of reference in my 114 you would see that…or note that several others appear that way as well once the comments run into a 2nd page. Not sure why some do and some don’t.

    Okay, that makes more sense. I do lots of things I don’t publicly describe in detail, because I don’t want to be put in the position of having people doing exactly what I do. Thus, for example on my carbon monoxide piece, I didn’t say how I am handling the problem during the gap period. During the period with the distressed property law being a problem, I didn’t disclose what my forms provided to protect myself and my client. (Not to mention that there I paid a real estate attorney to review what I had drafted, so it wouldn’t be fair to him.) I view disclosing such things as being risky. I’ll alert people there’s a problem, but I won’t necessarily say what the solution is where it isn’t clear.

    Rate this comment: Thumb up 0

  129. 137

    By David Losh @ 29:

    RE: Kary L. Krismer @ 26

    Snohomish County.

    The topic here is King County’s capacity charge. In parts of Snohomish County where it applies, the same rules apply. Also, I don’t believe Ardell was talking of Snohomish County in her piece (and in any case, what you said wasn’t what she said).

    Rate this comment: Thumb up 0

  130. 138

    By David Losh @ 31:

    RE: Kary L. Krismer @ 27

    The title rep is the one who has the relationship with the plant, the research. They can spend a day doing research while I do other things.

    Now why would the title officer stop to give you a quick answer?

    Because it’s their job. I’ve never had a problem with any of them giving me an answer. And the questions I ask don’t involve going back to the plant. If anything they involve going up the ladder. If it’s the plant I could probably figure it out myself on the recorder’s site.

    Rate this comment: Thumb up 0

  131. 139
    Doug says:

    RE: Basho @ 125

    We can ‘grasp’ it just fine, mister. We just disagree with it. It’s contrary to how utilities and public services have worked in the past. It’s contrary to how public services SHOULD work.

    -do you pay a large fee if you use 911?
    -do only parents pay the cost of schools?
    -do new neighborhoods or those with higher electric demand pay for new substations to be built?
    -should only people with poor relatives pay for federal welfare programs?

    No.

    If we just start divvying up public service costs to subsets of the public, we start to set a bad precedent.

    Rate this comment: Thumb up 0

  132. 140

    RE: Doug @ 139 – Clearly it’s different, but is it less fair?

    With electricity you’re right. The cost of upgrading the system is largely shared by everyone. But why should someone living in a 1940 house on Beacon Hill, which might be using less electricity today than in 1970, pay for extra capacity being added onto the system? How is that fair?

    Rate this comment: Thumb up 0

  133. 141

    RE: ARDELL @ 30 – BTW, I hope I was at least right about First Class and alcohol! If it were me you could through in some prescription stuff too. I’m a nervous flyer.

    Rate this comment: Thumb up 0

  134. 142

    By ARDELL @ 114:

    RE: Kary L. Krismer @ 7 -Why don’t you post that publicly so SB readers everywhere can benefit from the expanded knowledge base. Why brag about doing that privately vs sharing it with this topic in the comments for broad benefit?

    Here’s what I referenced in post 136, when I mentioned the CO detector. My blog identified the issue, but it didn’t say what to do.

    Practice pointer: Although this change in the law [requiring CO detectors] has been known for quite some time, the purchase and sale agreements were only recently changed to reflect the change and provide broker protection. That means that hundreds of transactions will close with out of date forms during the next couple of months. If you have a pending transaction and are unsure how to protect yourself, consult your designated broker or an attorney. Also note that SB 6472 provides protection to brokers if the seller does not install a detector, but this protection does not start until 6/7/12.

    http://www.trulia.com/blog/kary_l_krismer/2012/03/new_carbon_monoxide_detector_rules

    This topic here on capacity charges, and the paragraph above on CO detectors both point to flaws in the state-wide forms. The forms are hardly perfect. On this issue you’ve mentioned more disclosure would be a good thing. I agree, and that’s what the form I’ve drafted does, basically covering many of the things discussed in this thread.

    Rate this comment: Thumb up 0

  135. 143
    David Losh says:

    RE: Kary L. Krismer @ 136

    What forms?

    Rate this comment: Thumb up 0

  136. 144
    David Losh says:

    RE: Kary L. Krismer @ 37

    I can see you Googling the heck out of this issue trying to figure it out, but it’s a fee, undisclosed, standard industry practice, and you want the buyer to just eat the cost.

    The Broker should have known, and the topic discussed.

    Rate this comment: Thumb up 0

  137. 145

    RE: David Losh @ 143 – It depends on the topic. On the distressed property law the protections offered buyers and agents were completely inadequate, IMHO, so I had my own addendum to Form 22D drafted covering the issue better. After Craig identified a possible issue for buyers and buyer’s agents on short sales, I drafted some language to deal with that. For this issue I’ve drafted some language which while not part of the contract, does provide better information to the buyer client than the single paragraph contained in Form 21.

    Again the state wide forms are hardly perfect. Look at the CO detector issue. They’ve known that the law was changing on April 1, 2012 for months before that date, but they don’t change the forms until that date, meaning agents are possibly at risk for transactions where the offer was made before April 1, but close after April 1. That’s messed up.

    On the topic of messed up forms, look what they did with the Form 17 issue. In a complete knee jerk reaction they added some language requiring a buyer to chose whether or not there would be liability for certain Form 17 errors. Back then I argued it was completely unnecessary, and that it was a choice agents couldn’t possibly advise their clients on. The form was a malpractice nightmare. Now that choice is magically gone from the form, as is the language regarding Form 17 errors. Subsequent cases convinced the powers that be that the choice was not necessary, or perhaps they discovered it was a malpractice magnet. In any case, something I didn’t think should have ever been in the forms was gone. Again, the forms are not perfect.

    Rate this comment: Thumb up 0

  138. 146

    By David Losh @ 44:

    RE: Kary L. Krismer @ 37

    I can see you Googling the heck out of this issue trying to figure it out, but it’s a fee, undisclosed, standard industry practice, and you want the buyer to just eat the cost.

    The Broker should have known, and the topic discussed.

    The only thing I have Googled on this topic is “King County Capacity Charge” so that I can copy the link to King County’s site.

    Unlike you, I have actually understood this issue before Tim even posted this piece. I’m not sure you do yet. What I didn’t understand before this piece is how possibly common it is for buyers to not be adequately informed. That’s a problem! So much so I decided to give it additional exposure:

    http://www.trulia.com/blog/kary_l_krismer/2012/04/10_000_hidden_buyer_charge

    I agree that the broker should have known and discussed that topic with the client. What I don’t agree on is that the broker should pay the $2,000. That brings up the legal issue of damages, and damages here are not clear because it’s not clear that Doug could have bought this property for $2,000 less, or had the $2,000 paid at time of closing. If neither of those things could have likely happened, which is something Doug would have to prove, then Doug’s damages are likely zero.

    Rate this comment: Thumb up 0

  139. 147
    David Losh says:

    RE: Kary L. Krismer @ 145

    I’m floored.

    What you are describing is a problem, for every one involved. It creates a whole new set of liabilities.

    I used the term “industry standards” in my previous comment because that is what we have to go by. Like the sewer capacity charge which is another gift we give to builders by letting them pass along the charge in a weird way.

    It’s an industry standard, and we have standardized forms to prevent you from putting in your own language. Once you start putting in language, and special disclosures the party on the other side needs a lawyer to interpret what you are doing, or walk away.

    Rate this comment: Thumb up 0

  140. 148

    By David Losh @ 147:

    RE: Kary L. Krismer @ 145

    I’m floored.

    What you are describing is a problem, for every one involved. It creates a whole new set of liabilities.

    They’re not new liabilities. If an agent checks a box on purchase and sale agreement and doesn’t adequately describe the consequences of that choice, there is liability if there are damages.

    I’ve already mentioned checking standard title insurance on Form 22D. I would add another even worse choice is checking “election of remedies” on Form 21. In contrast, this choice isn’t as obvious. There are many good reason why “assumed by buyer” would be selected on a purchase and sale contract.

    Rate this comment: Thumb up 0

  141. 149

    By David Losh @ 147:

    It’s an industry standard, and we have standardized forms to prevent you from putting in your own language. Once you start putting in language, and special disclosures the party on the other side needs a lawyer to interpret what you are doing, or walk away.

    Agents cannot draft their own language. All agents are allowed to do is fill in standardized forms. To create your own forms you need to be a licensed attorney.

    On this issue though, I’m not sure what additional contract language would be necessary. The form I drafted is not part of the contract–it’s just additional disclosure. There could be liability for incorrect disclosure, but I don’t think that would be unauthorized practice of law.

    Rate this comment: Thumb up 0

  142. 150
    David Losh says:

    RE: Kary L. Krismer @ 46

    If it were disclosed, or discussed, which obviously it wasn’t.

    I get the charges; it is an unfair system, in my opinion, and many buyers over decades have been blind sided by the accepted builder standards that we have. This is just one small part of an over all gifting we all do for builders because they are 20%, or have been in the past 20%, of our economy, I think it’s 4% today.

    Rate this comment: Thumb up 0

  143. 151

    By David Losh @ 150:

    RE: Kary L. Krismer @ 46 -If it were disclosed, or discussed, which obviously it wasn’t.

    Assuming you’re talking about paying the $2,000, you’re not understanding the concept of damages. If the bank would not have accepted $2,000 less, or allowed the amount to be paid at closing, then Doug arguably did not suffer any damages. He would have to try to argue that but for that $2,000 to be paid over the next 3+ years, he wouldn’t have entered into the transaction at all. Even that might not get him to being able to prove damages. For that he would need to prove that the property was worth less than $2,000 more than what he paid. If for example Doug paid $250,000 for a house worth $300,000, it’s hard to see how he was damaged. He just didn’t get quite the bargain he thought he was getting.

    Rate this comment: Thumb up 0

  144. 152
    Doug says:

    RE: Kary L. Krismer @ 140

    Did you mean to use two different dates?

    It’s fair because if the house uses less electricity, it will receive a smaller bill. If it was built in 1940, the system capacity it paid for is most likely old and failing. Should it be nailed with a big maintenance fee when its poles and vaults are finally deemed unsafe? If it modernizes its wiring and installs a circuit breaker panel, should it be charged thousands for a capacity charge? I truly believe that the cost should be shared.

    Clearly you believe in some kind of a la carte system of utility and taxation. In that case, I’d like to opt out of paying for our military operations overseas, paying for public schools, etc. etc.

    That’s not how the system should work, in my opinion.

    Rate this comment: Thumb up 0

  145. 153

    By Doug @ 152:

    RE: Kary L. Krismer @ 140

    Did you mean to use two different dates?.

    Yes, because almost every house probably uses more electricity now than in 1940. Conservation efforts started around 1970.

    As to the rest of your comments, I’ve said I would need more information to determine whether this is fair. So I’m sort of in the middle.

    Rate this comment: Thumb up 0

  146. 154
    Doug says:

    RE: Kary L. Krismer @ 51

    That’s pretty much how I’m choosing to look at the issue :-)

    On the topic of ala carte vs. spread-out costs, perhaps a consistent a la carte system would be the most fair to everyone. However:

    -The system does not have the resources to do this. It would be a crushing amount of bureaucracy to impose in a wide-spread manner
    -Therefore, picking out only CERTAIN things to charge a la carte big fees for is unfair, as it is inconsistent application of the concept. Everyone should be charged for a la carte on everything, or everyone should share the cost on everything, (outside of voluntary, premium, LID projects.)
    -As a new homeowner, I am subsidizing the replacement of aging infrastructure for everyone.

    Rate this comment: Thumb up 0

  147. 155
    ARDELL says:

    RE: Kary L. Krismer @ 141

    Nope…I very rarely drink alcohol. The main event of my flight was buying lunch for the 75 year old handicapped woman sitting next to me. She didn’t have a credit card with her or know how to use the in-flight menu on Virgin America on the screen. They don’t let you use cash anymore.

    If I seemed a bit distracted while commenting at 10,000 plus feet above land…it was because after having bought her a lunch, I had to open all of her sealed packages. Only thing I had to drink was some “Smart Water” that I purchased before I got on the plane.

    My point was your saying you know how to fix this disclosure issue, and you are working on it, but you aren’t going to share the how of that…is like saying “I have candy…you don’t have any…nanny boo boo.”. If you’re not going to share…keep it to yourself.

    Rate this comment: Thumb up 0

  148. 156
    Doug says:

    Furthermore:

    Utilities constantly change and evolve. The primitive facilities built back in the 40’s have certainly had to be renovated several times to oblige efficiency and safety regulations.

    The system requires constant expansion and modernization. It requires constant investment, not a one time fee. To think differently is to fundamentally misunderstand utilites. Just because some owner in the 1940’s paid for some ammonia and a pool skimmer and called it a sewage treatment system doesn’t mean they’re off the hook forever, lest they ‘pay twice.’
    It’s not just new houses in the suburbs that necessitate new, modern facilities.

    Also this is a moot point, but these fees are built on building a facility that;s expected to serve the population up until 2030. Talk about overbuilding. I’m sure their population expectations are crazy too.

    Rate this comment: Thumb up 0

  149. 157

    By ARDELL @ 155:

    My point was your saying you know how to fix this disclosure issue, and you are working on it, but you aren’t going to share the how of that…is like saying “I have candy…you don’t have any…nanny boo boo.”. If you’re not going to share…keep it to yourself.

    As to the alcohol comment, I turned to the prescription stuff so that I wouldn’t have to drink before getting on the plane. The stuff I have really isn’t mind altering, but it does reduce stress.

    As to your material I just quoted, I just see liability in doing that. What if there’s a defect in my disclosure (or customized form) and I’ve put it on the Internet for others to use? By keeping it proprietary I only have liability to my own clients, or possibly the agent and party on the other side. If another agent on the opposite side of a transaction sees it and starts using it on their transactions, I can’t stop what I don’t know, but if a problem arises I can probably sue them for copyright infringement! ;-)

    Stated differently, on this topic I’ve said that additional written disclosure would be prudent, I’m just not going to state exactly what that disclosure should be.

    Rate this comment: Thumb up 0

  150. 158
    ARDELL says:

    RE: wreckingbull @ 133

    The only place I know that imposes extra costs for new homeowners for water, sewer, schools and other expanded system needs is in CA via a “mello roos” tax.

    From Wikipedia: “A Mello-Roos District is an area where a special property tax on real estate, in addition to the normal property tax, is imposed on those real property owners within a Community Facilities District. These districts seek public financing through the sale of bonds for the purpose of financing public improvements and services.[4] These services may include streets, water, sewage and drainage, electricity, infrastructure, schools, parks and police protection to newly developing areas. The tax paid is used to make the payments of principal and interest on the bonds.”

    However…CA is also the only area I know that bumps up the RE Assessed Value for RE tax purposes when a home is sold and immediately to the sold price. So they do not have a history of fair payment among constituents given the homes that are sold more frequently pay more tax than the next door neighbor who is an original owner. Of course that can work in reverse in a down market…but usually not, due to the neighbor’s ability to file a tax appeal as to value in a declining market.

    Rate this comment: Thumb up 0

  151. 159
    Basho says:

    Doug,

    Utilities are not a public service like schools, police, fire, or social insurance. The Washington State Constitution mandates that government (state or regional) provide for law enforcement and schools. The benefits of a fire department do not accrue solely to those whose property initially begins to combust; fires don’t respect property lines. We all benefit from social insurance because our economic status is in life is fluid and unpredictable.

    Even when utilities are government run, I am not aware of a single example of a utility being funded from a government’s general fund. Money from your sewer bill is not commingled with money from your property taxes. Utilities are generally not funded via taxation, nor are they generally run with a public service agenda. In fact, there are special accounting rules for public utilities because of their fundamental differences from general government.

    But the substance of your complaint was never that utilities should be run as a public service. Your complaint was that new properties were being charged more for sewer service than previously built properties. The economic rationale behind the capacity charge was simple. Building entirely new sewage capacity is far more expensive on a per unit basis than maintaining and upgrading existing capacity. I thought this point would be quite obvious, but I went through the entities financial statements to get some numbers.

    From 2003-2010 King County Wastewater spent $2.5B on capital assets. $1.6B of that was spent on Brightwater, a new sewage treatment plant built solely to serve new development in your drainage basin.

    Rate this comment: Thumb up 0

  152. 160
    MichaelB says:

    159 comments, 60 of them from Kary…or about 42%

    Kary, being a lawyer and graduate of UW, would it be possible for you to make your points a bit more succinctly?

    Possibly, you may wish to canvas a few neighborhoods looking for real estate clients rather than blowing so much hot air?

    Rate this comment: Thumb up 0

  153. 161

    By MichaelB @ 60:

    159 comments, 60 of them from Kary…or about 42%

    Kary, being a lawyer and graduate of UW, would it be possible for you to make your points a bit more succinctly? ?

    ROTFLMAO. You have time to count, but you think I have too much time? BTW, only about 5 of those posts were not in response to other posts.

    And while I don’t know where you possibly got the idea that lawyers are succinct, I did put it more succinctly elsewhere: http://www.trulia.com/blog/kary_l_krismer/2012/04/10_000_hidden_buyer_charge

    Finally, this was a very interesting issue Doug brought up, and people for the most part raised a lot of really interesting points. You should try to do that sometime, rather than continually posting nonsense, like things about kitten kickers, etc.

    Rate this comment: Thumb up 0

  154. 162
    Dweezil says:

    The comparison of sewer service to police/fire departments made me think of this story.
    http://thelede.blogs.nytimes.com/2010/10/06/tennessee-firefighters-watch-home-burn/

    Basically some guy in unincorporated Tennessee forgot to pay his fire dept subscription to the nearby city. The fire dept came out in case it spread to the neighbor who did pay, but they just watched his house burn. Both funny and sad.

    Rate this comment: Thumb up 0

  155. 163
    David Losh says:

    RE: Kary L. Krismer @ 161

    The discussion is that the Real Estate agent, or agents involved didn’t disclose, or discuss this issue with this buyer. I can make the leap that the listing agent may not have had this discussion with the seller. We don’t know if the Form 17 reflected this charge.

    The second point is that if this was a short sale the bank only looks at the net to the bank. A buyer can ask for anything pertaining to issues with the property as long as the net is good for the bank. Capacity charges can be paid, along with back taxes, or leins.

    Of course every situation is different, but this is a charge that may have been resolved at closing. We’ll never know now.

    This should have never been a surprise. These charges have been around for a very, very long time. The agents should have known, and that’s why I think in the spirit of good business the Brokerage, or Brokerages should step up to resolve this.

    The reason I followed this to a conclusion is that Real Estate agents have become total baffoons. Why not “write ‘em up” with redfin if this is the level of care, and concern there is for the trade.

    This is a no brainer; capacity charge? Absolutely let’s take care of that.

    Rate this comment: Thumb up 0

  156. 164

    By David Losh @ 163:

    The second point is that if this was a short sale the bank only looks at the net to the bank. A buyer can ask for anything pertaining to issues with the property as long as the net is good for the bank. Capacity charges can be paid, along with back taxes, or leins.

    Incorrect. The bank will typically review all the deductions from the gross sales price. Since the bank employees may be back east somewhere, the bank might not even agree to items which are clearly items which need to be paid (e.g. the water bill, which is ahead of them in priority.)

    Rate this comment: Thumb up 0

  157. 165
    David Losh says:

    RE: Kary L. Krismer @ 164

    How is that incorrect? How many times can an agreement go back and forth to the bank in escrow, or before escrow? How can a bank reject a transaction in closing that may net them more, or even the same?

    How is a purchase price arrived at in a short sale? What if the buyer walks at escrow, and the bank is stuck going through the whole process again?

    Explain incorrect, because this is the Real Estate business and anything is possible.

    Yes you can ask for the capacity charge, leins, clear title, the roof, or anything. It makes no difference to the bank, it is all dollars, and cents. Each bank has policies, and procedures. In those cases you make your offer accordingly. You reduce the price by whatever makes sense to you.

    The fact is this buyer had none of those opportunities because in my opinion the Real Estate agent screwed up.

    Rate this comment: Thumb up 0

  158. 166

    By David Losh @ 65:

    RE: Kary L. Krismer @ 164

    How is that incorrect? How many times can an agreement go back and forth to the bank in escrow, or before escrow? How can a bank reject a transaction in closing that may net them more, or even the same?

    How is a purchase price arrived at in a short sale? What if the buyer walks at escrow, and the bank is stuck going through the whole process again? .

    Welcome to the world of being a short sale negotiator! You’re making the assumption that the banks act in a rational and informed manner.

    But in any case, yes you can ask for whatever you want. Good luck though convincing the bank’s employee that this monthly charge on a sewer bill which doesn’t show up on a title has to be paid. They might agree, and then again they might not. You could ask them to pay for the seller’s barber, and they might agree. And as I noted, they might not agree to pay a water bill, even though that’s clearly ahead of their lien.

    Rate this comment: Thumb up 0

  159. 167

    Fair or not, the charges are apparently going up!

    http://seattletimes.nwsource.com/html/localnews/2018034968_sewerrates21m.html

    Rate this comment: Thumb up 0

  160. 168
    Rob says:

    RE: Basho @ 159 – This is a week late, but I just felt the need to get in another point here after reading your response. I think the main difference in opinion here is thinking about the function of a utility in different ways. I see a utility as closer to a service (They deliver power or they remove waste). You seem to see a utility more as infrastructure (It is pipes or wires).

    Thought of as a service, it makes no sense to charge some people more or less for the exact same thing. A kilowatt is a kilowatt no matter where you are. If the cost of delivering those kilowatts goes up, everybody should pay more. Not just people who bought a house after the cost of electricity changed. If you started getting haircuts in the 60’s, you don’t get to pay less than people who started getting them in the 90’s. Even if they’re using 50 year old scissors.

    Thought of as a piece of equipment, your point makes more sense. If I bought my wires years ago for a certain price why should I pay for peoples new (more expensive) wires.

    Of course a utility is a different animal than either of those things, but I think the service analogy is closer to the truth. Typically (in my experience), the cost of growth is included in rates. Perfect planning is impossible of course, but ideally all growth (and necessary increases in infrastructure) would be paid for by the increase in revenue from new ratepayers. If not, rates are not designed properly. Only charging new customers means that you’re insulating older ratepayers from the results of poor planning by the utility.

    And, to beat a dead horse, here’s another way to look at it: Growth doesn’t just happen in spurts. It is continuous. Every house built up until the policy change was growth, too, and contributed just as much to the need for new infrastructure. Choosing an arbitrary cutoff date is… uh… arbitrary. And unfair.

    Rate this comment: Thumb up 0

  161. 169

    RE: Rob @ 168 – You could actually make the argument that everyone should start paying the higher rate before the funds are spent to expand. That’s true if the expense to expand is really large, like when moving from hydropower to nuclear power. By raising the rates first, usage will decline, and you won’t have to spend as much money on expanding. If you expand first, you might find your usage doesn’t pay for the expansion, and then you have to raise rates even more!

    Rate this comment: Thumb up 0

  162. 170
    David Losh says:

    RE: Kary L. Krismer @ 169RE: Rob @ 168

    Alright you can beat me for this, but development is another business in the Real Estate industry. Every cost that is passed on is more profit to the developer. We are all paying for public transportation while developers keep asking to build fewer parking places. It’s profit.

    So, a developer goes into the middle of nowhere, like South Everett, and plunks down 200 houses, and asks to get paid for providing housing. Well, no one needs those 200 homes, as a matter of fact they are a blight waiting to happen, but hey, the developer pockets profits for contributing nothing.

    The tax payers in general all kick in, and the government encourages more of this suburban blight because the government gets about $90K in revenue when all the pencil pushing is done per unit.

    The developer should pay for infrastructure, the same as they should pay for the police, and fire protection that are now needed.

    Developers have gotten a free ride out of this Real Estate craze. They made huge margins, and are now swabbing up the excess cash, and clearing the books before they crawl back under the rocks.

    Oh yeah, that big demand? Every new house is at a higher price to build. It gives another false sense of appreciation. Now that the smoke is clearing, and the people who bought in early are losing hundreds of thousands of dollars in equity, we’ll need more police, and fire to handle the abandoned buildings.

    Rate this comment: Thumb up 0

  163. 171
    mukoh says:

    losh you are out of touch by a few years there is no development in s. snohomish county that is 200 lots. you have no idea what you are talking about. traffic mitigation paid by developer far more the accomodate the road impact. its how jurisdiction wastes it that is the other question. but you are in la la land detached from biz.

    Rate this comment: Thumb up 0

  164. 172
    David Losh says:

    RE: mukoh @ 171

    yeah, right, we’re in mop up mode.

    you brought up the 200 lots big time.

    Rate this comment: Thumb up 0

  165. 173
    mukoh says:

    RE: David Losh @ 172 – Dave, stick to some dipstick remodel ideas. It works for you. Obviously you have no knowledge further then that.

    Rate this comment: Thumb up 0

  166. 174
    Doug says:

    Since King County makes it exceedingly clear that this debt transfers whether the buyer is aware of it or not, in what manner is the seller compelled to ensure the awareness of the home buyer? What other fines commonly slip through in the home buying process that buyers are not aware of?
    If KC required the signature of the buyers to transfer the debt, I assure you that this would slip through the cracks far less often. We never signed anything, and assumed this debt by default.

    Rate this comment: Thumb up 0

  167. 175

    RE: Doug @ 174

    Doug,

    Unfortunately since this is considered a utility (which I disagree with and should be lienable like water & sewer) there are two ways for this to be disclosed to you. First would be on Form 17, Question 3 (c), and on form 22K “Utilities”.

    Other than that it would require changes in the law. Since I feel this is an important topic I am going to bring this up the the MLS as well as the State to see if there can be some changes made to help keep this happening from future buyers.

    Were you able to find any of your paperwork to see if it was disclosed. As this is a disclosure issue. The big question is “was it disclosed to you, but overlooked, or was the information withheld from you”, which would give you recourse against the other party.

    However, that being said, it may have been for naught as you purchased a short sale and the bank would possibly have refused to pay it anyway.

    Rate this comment: Thumb up 0

  168. 176
    Doug says:

    RE: Julie Lyda, RE/MAX Northwest Realtors @ 175

    The seller provided use with a document indicating the amount owed a week ago. My RE agent said either she hadn’t received it, or it hadn’t been given to her.

    When the seller was contacted, and reminded that his client had agreed to pay all utilities and that the house was to be lien-free, he said that his client couldn’t pay, and that this didn’t apply to one of these categories.

    Now, how this charge can be neither a lien nor a utility charge, I don’t know.

    Rate this comment: Thumb up 0

  169. 177
    Doug says:

    RE: Julie Lyda, RE/MAX Northwest Realtors @ 175

    The seller provided use with a document indicating the amount owed a week ago. My RE agent said either she hadn’t received it, or it hadn’t been given to *US, the buyers.

    When the seller was contacted, and reminded that his client had agreed to pay all utilities and that the house was to be lien-free, he said that his client couldn’t pay, and that this didn’t apply to one of these categories.

    Now, how this charge can be neither a lien nor a utility charge, I don’t know.

    Rate this comment: Thumb up 0

  170. 178
    David Losh says:

    RE: mukoh @ 173

    I was told not to engage cyber stalkers, but we are thinking of building for the first time in forty years. It may be a better way to hold dirt.

    Rate this comment: Thumb up 0

  171. 179
    Doug says:

    RE: Julie Lyda, RE/MAX Northwest Realtors @ 75

    I should say that I’m not going to seek recourse against anyone. My RE agent helped pay the balance, and we paid off the remainder. We got what was, in my estimation, a killer deal on the house, and a couple thousand bucks wouldn’t have made us walk away.

    I’m more concerned for new home-buyers who might be taken for a ride. I bet you see a lot of first time home-buyers looking at new houses in Snohomish, just like us. It’s a decent commute, and prices are good. However, those prices might be, in essence, underestimated by $10,000 across the board with the new connection fees. They could easily put someone over their budget. With all the scrutiny on credit-worthiness, and disclosure, that a fine like this could not be factored in, and left until the signing day, is crazy. Many are going to be pressured not to walk away when a $10,000 bill is dropped on them on signing day.

    I’m still raising a stink about it with my local councilmen.

    Julie, I’d appreciate it greatly if you brought it up, As I just want to raise awareness for those thinking about purchasing new (or never-owned) properties in King or Snohomish. This should be a very well known issue.

    Rate this comment: Thumb up 0

  172. 180

    By Doug @ 74:

    We never signed anything, and assumed this debt by default.

    Not, quite, because you signed a purchase and sale indicating those items did not have to be paid and would be “assumed” by you.

    Again though, assumed is not the correct term, because there is no personal liability.

    Rate this comment: Thumb up 0

  173. 181
    David Losh says:

    RE: Doug @ 179

    Good for you.

    Rate this comment: Thumb up 0

  174. 182

    RE: Doug @ 179

    Doug,

    I appreciate the fact that you are happy with your purchase and your agent that you have no desires to seek recourse against anyone regarding this issue.

    I was just trying to determine the facts of your situation as to whether the info was disclosed and overlooked or whether the info was not disclosed.

    The reason I ask is that if it was disclosed, but overlooked by you and your agent, perhaps the forms of disclosure are inadequate. Is there a need for a separate disclosure regarding the sewer capacity charges.

    It is a new charge that only affects homes in certain areas so I could see this easily being overlooked by an agent that isn’t familar with the area or service area of Brightwater.

    It’s nice when we can all have a learning experience without lawsuits involved. My husband Jess is on the NWMLS forms committe and we can bring it up at the next meeting as to whether this disclosure can be approved upon.

    Rate this comment: Thumb up 0

  175. 183
    David Losh says:

    RE: Julie Lyda RE/MAX Northwest Realtors @ 182RE: Kary L. Krismer @ 180

    These comments are exactly why people don’t like, or trust Real Estate agents.

    This is a charge that builders pass on with government approval because the builder makes more profit, and the government makes more in fees with each gift they give to builders.

    It’s not just Brightwater, or King County, or Snohomish County. It’s another builder fee that the builder isn’t paying.

    The agent should have known, should have investigated, but didn’t. More forms won’t fix that, more education won’t fix that.

    Brokerage responsibility, and over sight is the only thing we need. Holding this Brokerage accountable, or the Listing Brokerage accountable is much more appropriate.

    Now, Doug, on the other hand is doing the right thing by involving his Council person. This is another issue that the NWMLS, and Board of Realtors should bring up, and lobby for the protection of the consumer.

    Rate this comment: Thumb up 0

  176. 184

    By Julie Lyda RE/MAX Northwest Realtors @ 82:

    My husband Jess is on the NWMLS forms committe and we can bring it up at the next meeting as to whether this disclosure can be approved upon.

    Maybe they could also bring up the topic of making the form amendments more timely. The recent carbon monoxide detector provisions were not added to the forms until the day the new WAC was effective. That WAC was filed back in December, and I’m pretty sure it wasn’t a surprise. Language could have been drafted to allow the new forms to be used prior to April 1, so that the transactions closing this month and next (and short sales even later) will not be closing without the protective clauses.

    This is not the first time the forms have waited for an effective date, even though the new law applies to pending transactions. That really should be avoided.

    Rate this comment: Thumb up 0

  177. 185

    By David Losh @ 83:

    RE: Julie Lyda RE/MAX Northwest Realtors @ 182RE: Kary L. Krismer @ 180

    These comments are exactly why people don’t like, or trust Real Estate agents.

    This is a charge that builders pass on with government approval because the builder makes more profit, and the government makes more in fees with each gift they give to builders. .

    David, once again you don’t know what you’re talking about. This doesn’t just apply to new construction. It would apply to a 50 year old house if that house was recently connected. How many times and many ways does that need to be said?

    So it’s not just something builders somehow pass on through the county (unless you’re including builders long out of business). But yes, people who don’t understand things often distrust those who do. You’re evidence of that by your comment.

    Rate this comment: Thumb up 0

  178. 186
    mukoh says:

    RE: Kary L. Krismer @ 185 – Kary, its always the builder, or developers, or banks, or accountants, or the pen, or the paper. When you read it from David’s lala land. Its never the person who before making the biggest financial decision of their life “DIDN’T DO THEIR OWN D/D”.

    The goof hates builders yet will build to hold? Sounds like another brilliant business plan of a failure.

    Rate this comment: Thumb up 0

  179. 187
    Doug says:

    RE: Kary L. Krismer @ 185

    It’s not the primary case it’s going to happen, Kary. Not that would ever get in the way of a good slam on David, eh?

    If a builder is selling a home that is intended to be connected to the sewer system (and for all intents and purposes, IS) They should be paying the capacity charge, and not dropping them on home-buyers at the last second. That’s unethical and shady. i can think of no other reason it would be written like this other than the desire to prop up housing sales, and let builders off the hook, at the cost of long-term consumer debt.

    Spurring on current growth and development (billions for brightwater) passed on as consumer debt. Where have I heard that formula before?

    While I may have signed my intention to buy the house, it’s still shady that uncommunicated debts can be passed to me without a signature. (and again, this has happened enough that there’s a whole phone message from the main menu of the cap charge phone line dealing with the issue)

    Oh, and to all those who think it’s right and just that “growth pay for growth”:

    “Phillips notes that the city is not mentioning another part of the Robinswood Agreement, which spared Seattle from paying the entire bill to fix sewer-overflow problems that occur during heavy rain. Instead the cost will be spread around the county, saving Seattle approximately $200 million, according to county estimates.”

    http://seattletimes.nwsource.com/html/localnews/2016290834_brightwater23m.html

    New homeowners could be on the hook for $16,000 in Snohomish, because some dopes in Seattle Public Utiltiies forecast bubble growth to stay steady until 2030, and then decided to BUILD to forecast 2030 levels estimated in 1999. Boy, I don’t know how they could have erred!

    Rate this comment: Thumb up 0

  180. 188
    David Losh says:

    RE: mukoh @ 186

    There are builders who do good business. You don’t seem to be one of them. The construction industry has become a haven for swindlers looking for a quick buck.

    So making blanket statements, and telling the consumer that they should be on the hook, because the Real Estate agent didn’t perform, doesn’t sound right to me.

    Rate this comment: Thumb up 0

  181. 189

    By Doug @ 187:

    RE: Kary L. Krismer @ 185

    It’s not the primary case it’s going to happen, Kary. Not that would ever get in the way of a good slam on David, eh?

    Not sure what you’re saying there. Are you saying new construction hookups are more common than older construction hook ups? I wouldn’t be so sure that’s the case. There are huge areas of King County that were originally built on septic, and when those septic systems fail, they get hooked up to sewer if available. That includes areas as close in as Kent’s East Hill.

    There were under 7,000 new construction sales in King County for each of the past two years, per the NWMLS. It wouldn’t be at all surprising to me if connections of older houses were close to that number, or possibly even higher. Poor maintenance can ruin drain fields.

    Rate this comment: Thumb up 0

  182. 190
    Doug says:

    RE: Kary L. Krismer @ 189

    I’m saying that your rhetorical tactic when someone you’ve been disagreeing with makes a good point is to change the subject to something tangentially related, and basically just try to obscure the matter at hand.

    David: Thousands of new home-buyers are going to be hit with a back-loaded $10,000 fee? I think that’s wrong

    Kary: Old houses with septic tanks hooking into the system have to pay the cost too!

    That statement has nothing to do with David’s statement. You’re just throwing darts at the wall to try to dismiss a point with which it’s tough to argue.

    You then go on to trash him by saying he doesn’t understand the issue. Just like you said I didn’t understand utilities, when I’m a utility engineer, whose specific job is dealing with regulations and utility law.

    Rate this comment: Thumb up 0

  183. 191
    David Losh says:

    RE: Kary L. Krismer @ 85

    The standard defense of the Real Estate industry in Washington State is that we need better forms. What we need is Real Estate agents who can navigate the complex issues that are the Real Estate industry.

    According to you why not have a redfin sign ‘em up, and then have the buyer, and seller figure it out as they go along. What do we need Real Estate agents for?

    Take the very distasteful people in the Real Estate industry like this mukoh guy. Are you going head to head with him, or her? No. That guy might be a source of future Real Estate commissions so why not cut him some slack? Maybe the forms will cover your ass when dealing with these types of people.

    I do understand that the sewer capacity charge is charged even for existing homes. That is disclosed, discussed, planned for. A builder, or new construction however is the one who is connecting, why are they off the hook? How is that not disclosed? Why has this game, of some win, some lose, been going on, with builders, since I can remember, but this agent, just didn’t know, this Broker, just didn’t know. Let’s give them a free pass and fix the forms, yeah, that will do it.

    I take responsibility for my own mistakes, win, lose, or draw. Why is the Real Estate industry held to a lower set of standards?

    Rate this comment: Thumb up 0

  184. 192
    Doug says:

    RE: Kary L. Krismer @ 89

    Ok, perhaps that’s the case, I don’t care nearly enough to look. I took the counties at their word when they said this was mostly going to be paid for with new growth. This means builders shouldn’t pay capacity charges on new homes, why?

    (P.S. I also think that sellers of old homes should have to accurately disclose whether a house has a septic tank, fuses or knob-and-tube wiring, etc.)

    Just to clarify, I don’t think the builders are doing anything nefarious here. I think the law should be written differently.

    As to mukoh, I think it’s been well-established that I did my DD on my property. Apparently this neither qualifies as a lien or a utility charge. Sneaky, sneaky. What else can we sneak in and slam people with, and then cry ‘due diligence?’ 15% gratuity on all homes sold? Due diligence has to end somewhere, with the seller picking up the slack.

    Rate this comment: Thumb up 0

  185. 193

    By Doug @ 190:

    RE: Kary L. Krismer @ 189

    I’m saying that your rhetorical tactic when someone you’ve been disagreeing with makes a good point is to change the subject to something tangentially related, and basically just try to obscure the matter at hand.

    David: Thousands of new home-buyers are going to be hit with a back-loaded $10,000 fee? I think that’s wrong

    Kary: Old houses with septic tanks hooking into the system have to pay the cost too!.

    What David said was: “This is a charge that builders pass on with government approval because the builder makes more profit, and the government makes more in fees with each gift they give to builders.”

    He keeps trying to claim that this is some sort of gift from King County to builders. It isn’t something that only affects builders.

    Rate this comment: Thumb up 0

  186. 194

    By Doug @ 92:

    (P.S. I also think that sellers of old homes should have to accurately disclose whether a house has a septic tank, fuses or knob-and-tube wiring, etc.)

    They do have to disclose in Form 17 about the capacity charge and how many bedrooms the septic is rated for. We recently had a deal flip where the listing agent had the property listed for 5 bedrooms, the Form 17 said 4 bedroom septic, but King County had only approved it for 3. 4 was acceptable, 3 was not.

    That’s yet another area where King County is behind the times. In Snohomish you can get many of the septic records on-line. But in King you can’t get either the capacity charge or septic information on-line.

    Rate this comment: Thumb up 0

  187. 195
    Doug says:

    RE: Kary L. Krismer @ 193

    Maybe not insofar as there is foul play involved, but it definitely does have a net positive effect for builders, at the expense of buyers.

    Re: 194.
    That’s good, at least! Having a septic tank was pretty much a deal-breaker for us.

    Rate this comment: Thumb up 0

  188. 196

    RE: Kary L. Krismer @ 194 – Thinking about the technology thing further, when this system was set up getting information on-line wasn’t much of an option (if at all). Perhaps the core mistake made was the enacting legislation should have required the county (or someone) to record a document with the recorder whenever a sewer connection is made. It wouldn’t necessarily need to be a lien document, just a notice of connection.

    Currently there is a requirement to record a document prior to sale indicating a septic system is on the property if that hasn’t already been done from a previous transaction. Why not have a similar document which only shows the date of the connection? That would put people on notice, and allow them to then do the math to get a rough idea of what is likely owing.

    Rate this comment: Thumb up 0

  189. 197

    By Doug @ 95:

    : 194.
    That’s good, at least! Having a septic tank was pretty much a deal-breaker for us.

    Septic doesn’t bother me a great deal, except with REOs and where the buyer is an investor planning on renting. Of course it depends on the area, but it really does have the potential to save a lot of money because sewer charges are expensive, especially if you water your lawn and you don’t have a separate irrigation meter.

    I’ll make the same point I made above regarding these capacity charges. I don’t think I’ve ever seen an appraisal take into account whether the house is septic or sewer, but the asking prices and sold prices do often reflect that.

    Rate this comment: Thumb up 0

  190. 198
    Doug says:

    RE: Kary L. Krismer @ 196

    Why not just put the onus on the seller to inform the buyer of the debt, requiring a signature? Or charge the builder up front? Why take such a circuitous approach?

    I think if you’re selling a property, you should have to advertise the amount of outstanding debts and liens on the product up front. Otherwise, the price isn’t really the price, is it?

    Rate this comment: Thumb up 0

  191. 199

    By Doug @ 198:

    RE: Kary L. Krismer @ 196

    Why not just put the onus on the seller to inform the buyer of the debt, requiring a signature? Or charge the builder up front? Why take such a circuitous approach?

    I think part of what King County was thinking was to provide an easy way of financing sewer connections, and again their focus was probably broader than new construction. As noted somewhere above, besides this charge there’s likely $5-10k of other charges when connecting, and not all of those accept payment (e.g. the guy digging the ditch). They’re basically providing easy financing to get more people hooked up to sewer.

    However, if they made it a real lien for a specified amount, that would lead to issues getting financing, so they didn’t want to do that. Banks probably wouldn’t make loans (or refinance) on properties where there’s a $10,000 prior lien. They would require that it be paid off, which would lead to other complications.

    Rate this comment: Thumb up 0

  192. 200
    Doug says:

    RE: Kary L. Krismer @ 199

    The power and gas companies seem to do fine charging a cost to the builder. Just make it a requirement that the builder pay it.

    It’s probably because the builders would actually have the resources to sue or kick up a fuss, and make them justify their costs. Individual home buyers who are already strapped (and with $10k-16k in new sewer debt) are a lot less likely to do so.

    Rate this comment: Thumb up 0

  193. 201

    RE: Doug @ 200 – They probably could have had different programs for old and new construction. They probably had reasons not to do so, some valid and some not.

    Rate this comment: Thumb up 0

  194. 202

    Dave,

    So I presented this situation to First American Title and here is their response:

    “Yes we do reflect King County Sewer Capacity Charge issue on Every Title that goes out both for Snohomish and King County. Yes, escrow should be checking with King County to see anything is due. It is taken care of on the escrow side.”

    So I would be curious if this Sewer Capacity charge was listed on your title insurance paperwork.

    If this is the case, then the charge is listed on title and escrow’s role is to check for outstanding amounts due, your situation appears to have fallen through several cracks.

    Upon learning this I believe our forms of disclosure are adequate. Here are the ways it should show up.

    1. Form 17 “Seller Property Disclosure Form”.
    2. Purchase and Sale Agreement – Form K “Utilities”.
    3. Listed on the Title Insurance.
    4. Verified by Escrow for amount due.

    How many ways does it need to be disclosed? I think this is more than adequate.

    We can agree that this feels more like a “sewer assessment”, and as a buyer’s agent I would definately negotiate a payoff as part of the purchase agreement.

    I did read part of the RCW and this is a lienable utility that can be foreclosed on.

    Thanks again for bringing this topic up, as it’s been a learning experience for me.

    Rate this comment: Thumb up 0

  195. 203
    David Losh says:

    I’m sorry Doug, you made good points, and handled it well.

    Yes, Kary builders have a lobby, it is the Master Builders Association, and NAR goes along with it. The NWMLS has a vested interest in keeping builders happy for future listings, and the government makes more money, I think the quoted taxation with fees is $90K for new coinstruction housing units.

    Rate this comment: Thumb up 0

  196. 204
    David Losh says:

    RE: David Losh @ 16

    “This is another Seattle Bubble OMG! moment.”

    Kary had already had 6 out of 16 comments at that point, now we are over 200.

    OMG!

    Rate this comment: Thumb up 0

  197. 205

    By David Losh @ 203:

    I’m sorry Doug, you made good points, and handled it well.

    Yes, Kary builders have a lobby, it is the Master Builders Association, and NAR goes along with it. .

    Actually it would have been WR, or as they were known back then, WAR. And the reason they would go along with it is that it would lead to more houses being built at lower prices. Oh, how horrible is that! /sarc

    Rate this comment: Thumb up 0

  198. 206

    RE: David Losh @ 204 – If you understood the issues the number of posts would be a lot lower, and also you’d understand why there are so many posts.

    This is actually a very interesting issue. There’s not only the fairness issue, but also the issue of making sure consumers understand how the system works. I’ve already tweaked my practice because of this. I always have gone over the provision, but now I also do so in writing.

    Rate this comment: Thumb up 0

  199. 207

    By Julie Lyda, RE/MAX Northwest Realtors @ 2:

    1. Form 17 “Seller Property Disclosure Form”.
    2. Purchase and Sale Agreement – Form K “Utilities”.
    3. Listed on the Title Insurance.
    4. Verified by Escrow for amount due.

    Of those, really the form 17 is the best disclosure, assuming it’s properly disclosed. I don’t think 2-4 are that great. It’s actually Form 21 (or 28) of the P&S which describes it, and that’s in the boiler plate, and it really doesn’t describe it that well.

    As to the title insurance, many agents can’t read those things, so what chance does a consumer have?

    And finally, while Tim (the resident escrow here) said he discloses the amount due, I don’t know that is standard practice. Checking for past due amounts would be, but otherwise it seems to be outside the scope of the escrow. And if you’re talking about new construction, how independent is the escrow? I once had a builder escrow try to screw my client out of their homeowner title coverage even though there was nothing in the builder’s addendum which changed it to an owner’s policy. Do you really think that if they would screw a buyer over a $100 fee that they’re going to tell the buyer that $10,000 is owing? If they didn’t, I do NOT think it would be malpractice on their part.

    I really think a separate writing describing the system is what’s required. That would clearly draw attention to the fee. And that would be for the buyer’s agent to do.

    Rate this comment: Thumb up 0

  200. 208
    David Losh says:

    RE: Kary L. Krismer @ 206

    This is a learning curve for you. It’s a common issue, and that was pointed out to you.

    The issues are very clear, and Doug outlined them very well. Every one pointed out the issues to you, clearly. I’m not that bright, but am able to follow along.

    What’s clear is the agent screwed up, so in turn the Brokerage screwed up. Doug took the issue to the Broker, and had to have a discussion, even online, where Real Estate agents told him tough luck, you should have done more due diligence.

    Then the mukoh guy pops up with the same we win, you lose sucker comments, and that just gets passed over.

    Real Estate is a complex business, but once the Brokerage got caught, and there was money left on the table, they should have made the client whole. It’s just good business.

    That’s what seperates Real Estate from attorney work. We do deals, make our money, bury the mistakes, and move on to the next deal. There is always another deal, there is always more money.

    You don’t have a practice here to tweak. You’re a guy with a Real Estate license who is trying to figure stuff out. That’s just another part of the business.

    Rate this comment: Thumb up 0

  201. 209

    RE: David Losh @ 8 – The “learning” is figuring out just how misunderstood the system can be by consumers. After listening to Doug I realized this is more confusing to consumers than what I thought. After listening to some of the others who posted here early on, it’s more common problem than what I thought. That’s presumably because I have always tried to explain this to clients when explaining the Purchase and Sale agreement. Even so, I now want to make extra effort to make sure my clients understand. And I wrote a blog piece, linked above, so that more agents and more buyers understand.

    But David, don’t say the issues are very clear. You clearly don’t understand them even today. You have no idea what is or is not clear here.

    And seriously, you think the real estate business is about making mistakes, moving on and making more money?

    That’s what seperates Real Estate from attorney work. We do deals, make our money, bury the mistakes, and move on to the next deal. There is always another deal, there is always more money.

    That may be your standard of practice, but it’s not the standard of practice of any halfway decent agent in the state. That’s a pathetically sick attitude.

    Finally there’s this gem from you:

    You don’t have a practice here to tweak. You’re a guy with a Real Estate license who is trying to figure stuff out. That’s just another part of the business.

    An agent (or anyone actually) should always be looking to do every transaction better than the last. They should be constantly trying to perfect procedures, and be looking for ways to improve. If you don’t understand how things work, that’s impossible to do. Instead I guess those people just try to “bury” their mistakes, assuming they even realize they made a mistake.

    Rate this comment: Thumb up 0

  202. 210
    David Losh says:

    RE: Kary L. Krismer @ 209

    You learn Real Estate by doing. There are never enough classes, or forms. We learn by doing deals, because each deal is a new adventure. You never know what you don’t know until you do deals.

    Mistakes are made every transaction; is that a better term?

    This agent made a mistake, maybe both agents made a mistake. You pay, learn, and move on. Is that a better way to put it?

    You will make a lot of mistakes your next transaction, hopefully they won’t cost you money, and that is how you become more cautious.

    Here’s another saying in Real Estate: New agents can make more, and do more deals because they don’t know any better, or know the liabilities.

    If you remain frozen thinking about liabilities that also doesn’t help your client. It’s good to be aware, and know as much as possible, but you get that knowledge by doing.

    You’ve already stated you don’t stop the car, get out and talk with people you think might want to sell. You don’t door knock. How about cold calling? Do you cold call? If you just work by referral you may be stuck never knowing more.

    You gotta do deals. You take what comes, do your best, your very best, and move on.

    Rate this comment: Thumb up 0

  203. 211

    By David Losh @ 210:

    RE: Kary L. Krismer @ 209

    You learn Real Estate by doing. There are never enough classes, or forms. We learn by doing deals, because each deal is a new adventure. You never know what you don’t know until you do deals.

    Mistakes are made every transaction; is that a better term?

    This agent made a mistake, maybe both agents made a mistake. You pay, learn, and move on. Is that a better way to put it?

    I think that we probably both agree on that, or at least on every transaction there should be things you would question whether you would do differently for a possibly better result. Agents who don’t do that type of self-review do not improve their practice.

    As to this agent though, we don’t know for sure that he made a mistake. As noted above, Doug probably had four different things informing him of this charge. Perhaps the agent explaining it to him was a fifth thing, but he simply doesn’t remember it! We don’t know that for sure. But going beyond that, assuming that the agent said absolutely nothing about the capacity charge, that still would not mean that the agent was liable. As discussed above, with a short sale it’s rather unlikely the bank would agree to have this item paid. Assuming that’s the case, Doug did not suffer damages if he in fact got the deal he thinks he did, and therefore he could not recover from the agent.

    Rate this comment: Thumb up 0

  204. 212
    David Losh says:

    RE: Kary L. Krismer @ 211

    I have paid thousands of dollars for mistakes, and have had the same Real estate attorney since 1984.

    There are no damages if you do things right, but if they go wrong you become pro active, and don’t let the situation become fodder for an internet forum.

    Rate this comment: Thumb up 0

  205. 213
    Doug says:

    RE: Julie Lyda, RE/MAX Northwest Realtors @ 202

    I can tell you that the short sale complicated matters, as we agreed at the seller’s request that utilities be paid out of escrow.

    The seller agreed to pay utilities, then didn’t pay this, and the selling agent disputed that this amounted to a utility charge.

    So it looks like we were bamboozled. They decided that this should be settled out of escrow as a utility charge, and then that it should not be paid, as it’s NOT a utility charge. Then when I get the bill a year later (and why did it take a year, KC?), sorry the seller’s too broke to pay and we’re offended you even asked.

    So, I do feel that a little something unethical was going on here, and that I could have a case if I took it to court. However, the ~$1,000 I paid isn’t worth pursuing. I’m sure I’m not the first person to which this has happened, and the nature of this debt is problematic. In my opinions, It’s a poorly-written, NIMBY-ist law, that will have some unpleasant consequences, but it’s far from the first or last that will be passed in WA.

    Rate this comment: Thumb up 0

  206. 214

    RE: Doug @ 213

    Well it’s all moot now.

    And yes it is considered a utility charge by definition of the RCW.

    http://apps.leg.wa.gov/RCW/default.aspx?cite=60.80.005

    By the way, don’t feel bad. I got stuck with the sewer capacity charge when I bought my home in 1990 as it wasn’t even on the disclosure radar yet. :)

    I still don’t think you could have got either the bank or the seller to pay this in a short sale.

    However, for my own practice, I intend to make this an item for which the seller pays off at closing for any transaction I may do in the future on behalf of a buyer. It is definately a negotiable item.

    Rate this comment: Thumb up 0

  207. 215

    By Doug @ 13:

    The seller agreed to pay utilities, then didn’t pay this, and the selling agent disputed that this amounted to a utility charge. .

    Without seeing your forms it would be impossible to say, but if it was just Form 22k, requesting utilities to be paid, I would agree with the listing agent. Checking that box doesn’t get the capacity charge paid. You need to check the charges and assessments due after closing box.

    BTW, the selling agent is the buyer’s agent where there is a buyer’s agent. I assume you meant listing agent.

    Rate this comment: Thumb up 0

  208. 216

    By Julie Lyda, RE/MAX Northwest Realtors @ 14:

    RE: Doug @ 213 -Well it’s all moot now.

    Not until the statute of limitations runs. But as noted, a claim is doubtful.

    However, for my own practice, I intend to make this an item for which the seller pays off at closing for any transaction I may do in the future on behalf of a buyer. It is definately a negotiable item.

    Good luck with that. It will most likely just result in a higher sales price.

    Interesting question though. If a buyer came in with a non-contingent offer for full price, but asked for the capacity charge to be paid, would the buyer’s agent be entitled to a commission if the seller said no?

    Rate this comment: Thumb up 0

  209. 217

    I just received information on the capacity charge for one of my clients. It took King County six days to get the answer back to the escrow. That really isn’t very timely.

    Rate this comment: Thumb up 0

  210. 218

    By Julie Lyda, RE/MAX Northwest Realtors @ 14:

    RE: Doug @ 213

    Well it’s all moot now.

    And yes it is considered a utility charge by definition of the RCW.

    http://apps.leg.wa.gov/RCW/default.aspx?cite=60.80.005

    That’s incorrect. None of those statutes mentioned in that link are the capacity charge. It is RCW 35.58.xxx.

    Also, per this statute, if the Form 22k didn’t properly identify the utility, then there wouldn’t be an obligation of the escrow to pay it.

    http://apps.leg.wa.gov/rcw/default.aspx?cite=60.80.010

    I’ve heard there’s a case out there which requires a correct address for the utility. It’s extremely doubtful that the Form 22k even mentioned King County or gave its address.

    Rate this comment: Thumb up 0

  211. 219

    RE: Kary L. Krismer @ 218

    Yes it is a utility charge.

    I did provide the wrong link:
    http://apps.leg.wa.gov/RCW/default.aspx?cite=35.58.570

    Definitions of a utility:
    http://apps.leg.wa.gov/RCW/default.aspx?cite=60.80.005

    Personally to me it feels more like an assessment for the fact that it can be “paid off”. There is even a discount if “paid off” early.

    I just went through a sewer hook up in Lake Forest Park, it was really expensive. I don’t have the file in front of me, but maybe I’ll post the total hook up fees later. Not only was there a “one time sewer capacity fee”, in additional to the “sewer hook up fee”, there was the monthly “sewer capacity fees”.

    Rate this comment: Thumb up 0

  212. 220

    By Julie Lyda RE/MAX Northwest Realtors @ 19:

    RE: Kary L. Krismer @ 218

    Yes it is a utility charge.

    I did provide the wrong link:
    http://apps.leg.wa.gov/RCW/default.aspx?cite=35.58.570

    Definitions of a utility:
    http://apps.leg.wa.gov/RCW/default.aspx?cite=60.80.005

    The second link defines what a utility is by citing to other statutes. Specifically it says: ” All lawful charges assessed by a utility operated under chapter 35.21, 35.67, 36.36, 36.89, 36.94, or 57.08 RCW,. . .” RCW 35.58.570 is not cited, so the capacity charge is not a utility paid by an escrow at closing using the Form 22k procedure.

    Rate this comment: Thumb up 0

  213. 221
    David Losh says:

    RE: Julie Lyda RE/MAX Northwest Realtors @ 219RE: Kary L. Krismer @ 218

    So, even though you are now both aware of these charges, and Julie has been since 1990, and I think we can all agree that this system feels like this buyer was bamboozled, you are both talking about yourselves, rather than being as outraged as this consumer is.

    This is a typical cover your ass situation that Real Estate agents hide behind.

    This is a system that is messed up, but as common as Julie points out. The agent should have known, both agents should have known, and the Brokerages should have known, yet nothing was done, but collect the commissions.

    This consumer could have used redfin and had the funds to cover the cost.

    Now why are people still paying Real Estate agents?

    Rate this comment: Thumb up 0

  214. 222

    By David Losh @ 221:

    RE: Julie Lyda RE/MAX Northwest Realtors @ 219RE: Kary L. Krismer @ 218
    So, even though you are now both aware of these charges, and Julie has been since 1990, and I think we can all agree that this system feels like this buyer was bamboozled, you are both talking about yourselves, rather than being as outraged as this consumer is.

    First, I have a response to Julia’s latest post which is held up in moderation. But basically the capacity charge statute is not referenced in the utility statute.

    Second, it’s hard to be “outraged” when a consumer has probably been given 3 if not 4 disclosures of this issue. Even so, I agree the disclosure should be better and that’s why I will start giving clients written disclosure in addition to the oral disclosure which I’ve been doing. And I don’t know why you think that is just for me. While there is obviously a bit of CYA in such a disclosure, to protect against selective amnesia, the disclosure is given to better inform the client. I’m not sure how much more you want? Do you want me to start paying the capacity charge before I even show the property to the client? /sarc

    Rate this comment: Thumb up 0

  215. 223

    By David Losh @ 21:

    <Now why are people still paying Real Estate agents?

    LOL. This is exactly why consumers should be dealing though real estate agents, but like anything else it’s important to pick the right agent.

    How many consumers do you think are aware of this issue when they start looking? This thread has proven that too many are not aware of it even after they buy! Using an agent and picking the right agent is extremely important!

    Rate this comment: Thumb up 0

  216. 224
    David Losh says:

    RE: Kary L. Krismer @ 222

    This thread proved that the right agent wouldn’t be available.

    We advocate for the client, as much as we facilitate.

    This capacity charge issue has been a part of my practice since 1986, as Ardell pointed out to you, and that was another nowhere discussion. I know about the charges because we paid them for the client, I split it with my manager.

    These fees, and charges are always there in one way or the other.

    Even if this charge was disclosed, as you are now claiming, four times, the negotiation with the client should have been handled by the Brokerages, which it was not.

    I’m betting the Brokerages hid behind the same cover your ass type of talk we are seeing here. They should have handled it, they have the money to handle $1000, but they chose not to. It’s just another haha, got you sucker, and we got ours, better luck next time.

    It’s just not good business, and that is the only point here.

    Rate this comment: Thumb up 0

  217. 225

    By David Losh @ 224:

    This capacity charge issue has been a part of my practice since 1986, as Ardell pointed out to you, and that was another nowhere discussion. I know about the charges because we paid them for the client, I split it with my manager.

    That’s incredible, considering the charges have only been in effect since 1990. Check out either the King County website or the first link to the statute which Julia gave above.

    You really are a forward looking agent! You pay charges that won’t even exist for four years!

    Rate this comment: Thumb up 0

  218. 226

    By David Losh @ 24:

    Even if this charge was disclosed, as you are now claiming, four times, the negotiation with the client should have been handled by the Brokerages, which it was not.

    “Now claiming?” The numerous times this was disclosed has been addressed repeatedly during the first 100 posts on this issue.

    Not sure what you mean by “negotiation with the client.” If you mean better disclosure, I have been agreeing with that. If you mean negotiate to have the sum paid at closing, the bank almost certainly would not have approved that in the context of a short sale.

    Rate this comment: Thumb up 0

  219. 227

    By David Losh @ 24:

    I’m betting the Brokerages hid behind the same cover your ass type of talk we are seeing here. They should have handled it, they have the money to handle $1000, but they chose not to. It’s just another haha, got you sucker, and we got ours, better luck next time.

    Do you have memory problems like pfft? The fee was about $2,000 and the broker did offer to pay half. Doug declined.

    And again, that was actually a very generous offer because it’s not clear at all that Doug suffered any damages. He just didn’t get quite the bargain he thought he was getting. Doug has agreed to that point, but for some reason you’ve either forgotten or don’t understand.

    Rate this comment: Thumb up 0

  220. 228
    Akp says:

    I purchased a home in 2008 in Snohomish County, close to Mill Creek. I was told about the Sewer Capacity charge and as a new home owner this charge was a total of 7000$. I could pay upfront 5000$ and get a discount.
    But yes we are paying a huge amount of money for “sewer”. I pay monthly 51$ sewer charge to Alderwood Waste Water District and then 125$ every quarter to King County to treat the waste water.

    Rate this comment: Thumb up 0

  221. 229
    Ryan Halset says:

    I never could quite figure out why Impact Fees for Roads, Parks or Schools, are required to be paid in-full at the time the developer sells a new home, but King County doesn’t roll the sewer capacity charge into new construction as well…which, when you think about it, is essentially an Impact Fee on the sewer system.

    If it is rolled into the initial permitting fees when building a home, then it can be more appropriately and clearly accounted for in the cost of building/selling a home. That seems like a more fair solution than leaving it up to buyers/sellers to negotiate the remainder of the fee for the next (potentially) 15 years…and leaving it up to King County to verify whether or not there is a capacity charge or not. Since these impact fees can typically be paid when a developer sells a home, rather than up-front or out-of-pocket, it seems that this would alleviate a lot of headache.

    Rate this comment: Thumb up 0

  222. 230
    Joe says:

    This is a related issue, but one I can’t seem to find addressed anywhere. What are the stipulations on billing capacity charges to renters?? We’ve been renting for 2 years in Seattle – both complexes built after 2009. Ou current landlord has switched to third-party billing, and now charges us directly for the KC Capacity Charge. Since we have no vested financial interest in the property, is this even legal? Seems like the “standard” way to do this would be to roll the charge into the rent rather than have it billed monthly (I assume this is what our previous landlord did, since we’d never heard about this until this month!)

    Any help or advice – especially resources – would be appreciated. I’ve already followed links in this post, and nothing seems to speak specifically to renters.

    Rate this comment: Thumb up 0

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Please read the rules before posting a comment.