Been burned by a tenant's unpaid water bill in Michigan? READ THIS
Disclaimer: I am not a lawyer and this is simply my personal interpretation of this legal act. Consult your attorney before relying on any information contained in this blog!
1939 was a good year for rental property owners.
Municipal Water Liens Act 178 of 1939 to be specific. What you need to pay attention to in this Act is Section 123.165.
This Act set up the ability of a municipality to collect unpaid water and sewer charges by placing a lien on the property at which the water was consumed or otherwise accrued.
However, this Act also set up an exclusion for lessors!
The Act allows for the filing of an affidavit with the appropriate municipality which exempts the lien from being placed on the property when the home is leased legally and the tenant is responsible for the payment of water/sewer bills.
123.165 states, in part:
"...this act shall not apply if a lease has been legally executed, containing a provision that the lessor shall not be liable for payment of water or sewage system bills accruing subsequent to the filing of the affidavit provided by this section. An affidavit with respect to the execution of a lease containing this provision shall be filed with the board, commission, or other official in charge of the water works system or sewage system, or both, and 20 days' notice shall be given by the lessor of any cancellation, change in, or termination of the lease. The affidavit shall contain a notation of the expiration date of the lease."
Let's break this down:
Step 1: Have a legally executed lease which contains a provision that the tenant be responsible for the payment of water/sewer bills directly to the municipality.
Step 2: Draft a statement that you and tenants can sign stating the facts of the lease and their responsibility for the water/sewer. List the beginning and end date of the lease. GET IT NOTARIZED.
Step 3: File the completed statement with the appropriate municipality and make sure you give the municipality 20 days notice of any changes in the lease including renewals.
Now, give this to your attorney and make it work for you!
Comments (3)
Michigan
I have been left with a previous property owners $1000 + water bill (lesson learnt thanks) I am really surprised to find that I am responsible for paying, and really surprised that it's legal for them to "make" me pay for a utility that I never contracted into, did not ask for nor sign for. I'm really interested to know how this ever became law. It feels very discriminatory.
The previous owner has run a delinquent bill since 2012, there was no lien on the property, and so he will now be moving on to a rental property, after living on my dollar for his 30 day notice and have the water put in his name again, and I'm left to pay for his pleasure. I think its negligent that the utility company never bothered chasing this guy down any time over the last 5 years. Will they be sending me the bill for his new address? I'd be willing to bet they slap a lien on the property within a matter of days if I don't pay.
Victoria Gibson, over 7 years ago
@Jeff Rabinowitz thanks for the comment. I can certainly see this happening, especially in areas hit hard economically or with high delinquency rates. I use it in Kalamazoo and honestly when I first did it no one at the City was even aware of the law. I spoke to one person who had been there 20 years at the time who didn't know. I didn't get any pushback when I filed the affidavit.
Aaron Treloar, over 8 years ago
Several Cities in SE Michigan simply refuse to comply with this law or they require an absurdly high deposit before they will transfer the water/sewer to the tenant's name. I tried this several times but no longer bother. I have no interest in paying the deposit and it is not likely I could convince my tenant to. I have been invited to sue the City a couple times. I have declined that invitation also.
What Cities have you been successful in implementing this?
Jeff Rabinowitz, over 8 years ago