What happens if I don't pay a utility bill on a house I've already sold?

Question

I recently sold a property I used to own, and was told that the new owner had transferred all the utilities. I followed up on all but one (which were transferred), however it seems that the water utility was not, and I received a bill for a period starting after the closing date of the house.

I don't want to pay the bill, since I didn't own the house at the time or use any of the service, however I'm not sure what the consequences of doing so would be. I don't really care if they shut off the water or put a lien against the property (I think? It seems like it would be easy enough for the new owner to take care of) but I wouldn't want to have my credit dinged because I'm trying to close on the purchase of another property right now.

What type of negative repercussions could there be for me personally if I don't pay the balance?

Answer 1

First, as a realtor, part of what I'm supposed to do to ensure a smooth closing is the make sure the utilities are taken care of. This means that gas, electricity, and water companies have all been notified and produced a final bill which needs to be paid prior to, or at the closing. It may seem minor, but I've seen money held back at closing if the final bill is produced and shown as paid.

This is much further along. You have a bill, if it's yours, you need to pay it. If it isn't, you need to convince the Water Dept that you are in the right. Make an appointment, and show them the closing date. If your being billed for water after that, they should help you adjust it. Keep in mind, from where they sit, you were the account holder, and if you never asked for that final bill, they are expecting that you continue to be responsible.

Answer 2

To me, there are 2 separate issues to be addressed here:

Q1. Are you legally responsible for the bill?

The short answer here seems to be yes. While it may be as simple as sending a polite letter to the new property owners, asking them to pay the bill and letting them know that the service needs to be transferred into their name now, that is probably all that can be done. Legally, I don't believe the utility company can simply change the name of the person that owes the debt; even if you prove the house changed hands.

Think about it from their point of view: how can you tell someone (else) they're legally responsible for a service or bill they never agreed to pay. You really can't.

That brings us to the next question:

Q2. What happens if you don't pay the bill?

In most cases, nothing "happens". However, the utility company can:

• Keep your deposit if you paid one.
• Report the debt associated with the unpaid bill to the credit companies as an unpaid debt, and eventually debt collectors.
• And, probably most importantly, if you are still with the utility company at your new address they could theoretically cancel your current services (however, I find this highly unlikely).

In the end though, I'd simply appeal to the good faith of the new tenants to see if they will pay their portion. If they simply refuse, you're probably better off just paying the bill yourself as opposed to spending more of your valuable time and energy trying to fight a losing battle to get the bill voided.

Answer 3

A similar thing happened to me. The place I was selling no longer had a tenant so there was no active cable or phone service. But the water and electricity were still on. Closing had been delayed once by the buyer, so I didn't contact the utilities until the day after closing. At closing I informed the buyer and their agent that I would contact the utilities first thing in the morning. But because it was a Friday both utilities told me their policy was to do the switch on a Monday. At noon on Monday the electric utility called to say the new owner had yet to contact them, they wanted to know what I wanted to do. they would cut the power at 5PM unless I agreed to switch it back. I said cut it. Then I called all the contact information I had for the buyer and their agent.

In your case I would do the same. Contact the buyer and their agent. Give them a few days to make the switch, and then tell the water company the last day you will be responsible. After that is done discuss with them the bill that covers the period after they purchased the property.

The utility company will still expect you to make the payment, they only know you were on the bill as the responsible party. It is possible that their system double billed, so ask the new owner and the company to check. But if they didn't double bill and you don't pay the bill, it will be a hit on your credit report if you don't pay it.

When you sell a property you should make sure you get a bill from the company showing that this is a final bill. It generally sent right after your responsibility ends, and doesn't wait until the normal billing cycle. They also want to know where to send the bill. If you don't receive one within a few days call and find out why.