Restaurants are sure to need water service. When a restaurant owner rents or buys real estate, they may inherit the past due water bill for the property. A commercial water bill can be high — $10,000 to $20,000 is common. Even if the bill is technically owed by the previous owner or tenant, the county won’t set up a new account until the balance is paid. The new tenant must pay the bill and then try and collect it from the seller, which can be difficult and expensive.
The last thing a new business needs is to pay someone else’s water bill to get started. A few years ago, the legislature addressed this problem and passed a law that requires water departments to provide a full bill within 10 business days of the request. If that bill is paid in full or if the bill is not provided in the required time frame, then the water department is barred from refusing service or filing a lien against the new owner.
In Atlanta, real estate closing attorneys have more direct access to water departments. Commercial real estate attorneys can navigate the complexities of commercial real estate closings easily, but most avoid navigating the hassles of contacting county or city water departments. They will appreciate working with a closing attorney who routinely deals with local government systems.
When it comes to potential surprises at the closing table, water bills are worse than unexpected fees because they automatically become liens on the property. Commercial and residential water bills are treated very differently. For residential property, if the water bill is in the owner’s name then it becomes a lien on the property.
For Commercial property, every water bill is a lien on the property, no matter the name on the account.
Not every closing attorney checks for unpaid water bills as a part of their process. A commercial tenant starting out in a space wants to be sure they will have water service. A commercial real estate attorney negotiates the terms of the sale but rarely handles the title search for the property. They will appreciate working with a closing attorney who knows how to find unexpected liens on property.