Can utility company place a lien on the landlord's property if tenant does not pay his utility bills?

Question

I have received a letter from EDCO Disposal Corporation stating that my tenant is past due on several payments, and that if the amount is not paid in the next 30 days ( by the time I got the letter it would be only 20 days left), a lien may be placed on the property for the unpaid amount plus administrative fees.

I have no agreement for their services with EDCO for this property. Tenant has his own agreement with EDCO and is responsible for his own bills.

My tenants always set up their own accounts with utilities companies and pay their own utility bills. I do not even know which utility companies they use, and utility companies do not usually know my name or my address at all.

Can EDCO or any utility company actually place a lien on the landlord's property if tenant does not pay his utility bills? How can I fight it?

Marcia Maynard · Answer

Call the utility companies and ask.  In our municipality the utilities that can put a lien on the property are water/sewer (a city owned utility) and garbarge/recycling (a city contracted utility).  No need to be scared by this, it is very common practice.

Since the city can put a lien on the property for unpaid bills, you can also get information from them about your tenant payment history.  We automatically receive a copy of our tenant's water bill, which is very telling if the water use goes up (water leak? unauthorized occupant moved in?).  We also get copies of the late notices/shut off notices, which we then call the tenant on.  If the tenant doesn't pay the bill in a timely manner, we serve them with a legal "notice to comply" which is a 10-day notice in our state.  Make sure you cover responsibilities about paying utilities in your lease/rental agreement.

Also, make sure the utilities that can put a lien on your property know how to reach you in the event of a tenant default.

One time there was a slip up at the utility office.  When the tenant defaulted, as the next in line we should have been notified, but they mailed our notices to the rental address, while the tenant who caused the default was still living there!  Our first clue of the tenant default was the pile of trash building up outside the residence.  A call to the garbage service revealed they had already turned us over to a collection agency!  The collection agency could have found us easily through public property records, but made no attempt to do so.  They had insufficient information in their files, so it had not gotten to the point of affecting our credit.  Whew!  We paid the bill and never recouped the damages because the tenant moved out just short of our evicting him.  Security deposit wasn't enough to cover all that he owed to us.  If we hadn't been there to see the problem and take care of it, it could have resulted in a lien on the property.

These things can and do happen.  Good luck with your situation.

Troy Fisher · Answer

If you have a utility company that can and or will place liens on your property, pay it yourself, and bill it to the tenant. Also make sure that missed payments on utilities are an evictable offense.  In my experience it is usually only the water company that can place a lien on the property.  But YMMV.

Larisa G. · Answer

What scares me is that any utility company can place a lien on your property and you will not even know about it since you do not have agreement with them and they do not know your name and mailing address to notify you that there are problems. Something is not right in this picture in my opinion.

Sam Leon · Answer

It varies depending on your locale and the type of utilities.

Where I am gas electric cable and phone they will not.  They will continue to bill and go after the tenant who established the account.

But if it's water sewer with the city then it depends.  City of Fort Lauderdale used to but last time I called back in January 2014 they told me they no longer will place liens on properties.

As to whether they can refuse new service or connection if the address has an outstanding balance from a previous occupant for the most part in my area it is no.  There are some subtle variations but most down here will establish connection for new service for a new occupant.  Here are some cases in City of Miami Beach.

http://floridarei.com/forms/utility.php

Account Closed · Answer

Larisa G.  My understanding is that it depends on the water district.  Public water companies in CA can't hold landlords responsible for tenant bills or lien property for tenant bills.  This is spelled out somewhere in the Civil Code. I've had tenants in two different cities run up huge bills and have the water shut off.  I did not owe their past due bills.  However, one of the water companies would not open a new account for the next tenant because of so many past due accounts from all previous tenants (before I bought it).  So they required me to open the account.  I asked them to show me where this was spelled out but they never got back to me.  I ended up selling it so never found out what the real story on that was.

Is your water district private? Even so, as for something in writing that shows where in the bylaws that you owe for tenant accounts.

Christina R. · Answer

Elizabeth  Colegrove

- I'm in Maryland - what area was/is your mom in?

Elizabeth Colegrove · Answer

@Christina R.

She owned a property in Annapolis, MD till this past fall :)

Elizabeth Colegrove · Answer

@Larisa Grebeshkova

It honestly depends on the area. My mother was a landlord in Maryland for 25 years. Their area the water could put a lien on the property if the tenets didn't pay. For the same reason, they had 45 days before the security deposit was due back in order to allow the landlords to get the final bills.

I would definitely double check California's rules.

Joel Owens · Answer

You have to remember we are all living in various states in and investing in some cases in other states from where we live.

Anytime you look at purchasing a property you have to know the lien laws in the county, city.

I have seen variations all over the board from where they can do it to where they can't lien.

Another part to this for apartment buildings for example is if you are not local in some areas and the landlord pays utility the companies will charge 3 to 4 times regular deposit requirements. I saw this one time where the buyer had to pay a 15,000 deposit to the city because the city did water, sewer, and trash and saw the out of town investor as more risky than the local owners who had it before.

The key to all of this is to cover as many bases as possible before you buy.

Account Closed · Answer

I think the water company has a right to refuse service to a property's address if they are owed money.

Joe Gore

Can utility company place a lien on the landlord's property if tenant does not pay his utility bills?

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