Unpaid Water Bill: A Tale of Buyer Beware

Did you know that water charges attach to a property, not the individual?

An Ottawa homeowner was unaware until he received a letter from the city that he was on the hook for the previous resident’s bill.

According to CBC, the new homeowner must pay four months of water arrears dating back to before he acquired the property in 2017, “plus accrued interest to date.” Total owing is nearly $500.

Unlike other utilities, water charges transfer from one owner to the next after a sale. The city must take steps to locate and collect from the previous owner before charging the arrears to the new one, but if it comes up empty-handed, the new owner is required to foot the bill.

A lawyer interviewed for the news story said that title insurance is likely the easiest way to deal with this problem, should it arise. Title insurance protects against losses you might incur because of undetected or unknown title defects, including unpaid bills.

In most instances, an unpaid bill would be caught in advance of a sale closing, as long as the buyer’s real estate lawyer requested water and tax certificates to identify outstanding charges.