Let The Home Buyer Beware: MULVIHILL
The City of Ottawa would be wise to follow its own guidelines.
When a home buyer reaches the end of the purchase process, closing costs should be clearly explained by their lawyer. That lawyer is well-versed in exactly what those costs include and may encourage buyers to opt for title insurance. Purchasers would be wise to follow this advice as title insurance covers outstanding charges and bills attached to a property even after the property changes hands.
It is the home-buyer’s lawyer whose responsibility it is to ensure all utility charges are paid by the seller up to the date of closing or occupancy. Utilities include electricity or hydro, gas or oil and water. Outstanding charges or unpaid property taxes should be liened against the property title. The title cannot be transferred until any and all liens are cleared.
The City of Ottawa has recently been newsworthy by charging buyers for outstanding water bills belonging to former owners. Why? If outstanding Hydro Ottawa bills are cleared prior to title transfer, why aren’t Ottawa water-and-sewer bills cleared the same way? Does the City of Ottawa not place a lien on title for the unpaid amounts? If not, why not?
According to the City of Ottawa, the outstanding water bills remain with the property. Why? All other utilities are the responsibility of the seller not the buyer. Why are water bills treated differently? The City of Ottawa’s explanation that any outstanding water bills are attached to the property doesn’t make sense and contradicts itself in an online post:
Notification is key: property owners need to notify the city when they move in or out to ensure accurate billing and prevent liability for charges accrued by previous or subsequent occupants.
The City of Ottawa might have overstepped its boundary by charging outstanding water bills to new homeowners especially if they don’t follow their own guidelines. Instead of liening the property for outstanding utilities, it seems the City of Ottawa tries to take the easy way out by charging the new owner.
In any event, let the buyer beware.
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“Buyer beware” is a long standing concept of contract law. It shifts the responsibility clearly on to the shoulders of the purchaser. How that fits with the City of Ottawa is that no one who reports to city hall is willing to accept responsibility for anything, at any time. So, no surprise that city hall is refusing to accept responsibility for its inability to run a standard accounts receivable function. A function that has existed for millennia.
Thanks for this, Donna. I wonder what would happen if a potential new home buyer called the city to find out if there were any outstanding amounts on water bills due on a home they were considering purchasing. My guess is the city would ask if the caller was the current owner and when the person responded “No”, they would be told that due to privacy issues . . . . . Caveat emptor indeed!