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.
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By David Losh @ 99:
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.
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By David Losh @ 97:
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.
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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 :-/
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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.
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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.
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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.
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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.
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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.
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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.
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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…
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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.
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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.
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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.
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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. :(
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By Sparky @ 10:
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.
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By ARDELL @ 12:
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.
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By ARDELL @ 14:
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.
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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.
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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.
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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.
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By Sparky @ 118:
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.
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By Kary L. Krismer @ 19:
Again from King County:
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).
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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.
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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.
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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.
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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?
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By David Losh @ 122:
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.
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By David Losh @ 123:
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.
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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.
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RE: Kary L. Krismer @ 26 –
Snohomish County.
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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.
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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?
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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.
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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.
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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
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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.
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By ARDELL @ 30:
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.
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By David Losh @ 29:
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).
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By David Losh @ 31:
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.
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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.
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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?
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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.
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By ARDELL @ 114:
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.
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.
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RE: Kary L. Krismer @ 136 –
What forms?
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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.
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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.
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By David Losh @ 44:
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.
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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.
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By David Losh @ 147:
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.
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By David Losh @ 147:
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.
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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.
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By David Losh @ 150:
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.
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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.
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By Doug @ 152:
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.
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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.
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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.
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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.
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By ARDELL @ 155:
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.
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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.
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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.
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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?
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By MichaelB @ 60:
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.
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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.
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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.
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By David Losh @ 163:
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.)
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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.
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By David Losh @ 65:
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.
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Fair or not, the charges are apparently going up!
http://seattletimes.nwsource.com/html/localnews/2018034968_sewerrates21m.html
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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.
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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!
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RE: Kary L. Krismer @ 169 – RE: 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.
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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.
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RE: mukoh @ 171 –
yeah, right, we’re in mop up mode.
you brought up the 200 lots big time.
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RE: David Losh @ 172 – Dave, stick to some dipstick remodel ideas. It works for you. Obviously you have no knowledge further then that.
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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.
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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.
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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.
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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.
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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.
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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.
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By Doug @ 74:
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.
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RE: Doug @ 179 –
Good for you.
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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.
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RE: Julie Lyda RE/MAX Northwest Realtors @ 182 – RE: 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.
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By Julie Lyda RE/MAX Northwest Realtors @ 82:
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.
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By David Losh @ 83:
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.
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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.
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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!
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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.
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By Doug @ 187:
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.
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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.
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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?
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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.
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By Doug @ 190:
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.
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By Doug @ 92:
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.
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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.
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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.
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By Doug @ 95:
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.
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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?
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By Doug @ 198:
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.
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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.
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