I am helping a tenant with her Chapter 7. She owes $1400 to the city of Delray Beach Utilities department. I sent out the notice of automatic stay and later called to have the water turned back on in my name (I will be making the water payments from now on). Everyone I have spoken with so far has been giving me a pretty hard time. They are saying they may refuse turning the water back on as long as this tenant lives at this address. Someone in the City Attorney's office even told me that after te $1400 is discharged, they will place a lien on my property. This sounded absurd but I didn't try to argue. I just want to get the water turned on and then deal with the rest later. Does anyone know if the city has a leg to stand on here? What if they refuse to turn the water back on?!?!?! This is my first post and any help would be greatly appreciated...
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I believe a utility can charge a hefty deposit once you BK on them, but I don't think they can refuse service if you are willing to place a deposit with them.
I don't know about the lien issue. It seems since the service was in your tenant's name, they shouldn't be able to place a lien on your property since it wasn't your debt.
If that was so, there would be liens all over the place on LL's property for unpaid utility bills. Property could be sold for a 50.00 utility bill then the satisfy the lien, doesn't make sense.
If the bill was in your name previously or you co-signed I could see how it MAY happen.
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Last edited by StartingOver08; 02-06-2009, 01:44 PM.Filed CH 7 9/30/2008
Discharged Jan 5, 2009! Closed Jan 18, 2009
I am not an attorney. None of my advice is legal advice in any way..
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I know that here in WA it is part of our rental agreement that we must stay current on water, electric & gas, and that if we don't it is treated the same as if we didn't pay our rent and we can be evicted... so I'm guessing that the utility companies can go after the property owners if the tenant doesn't pay.
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Originally posted by emilfleysher View PostI am helping a tenant with her Chapter 7. She owes $1400 to the city of Delray Beach Utilities department. I sent out the notice of automatic stay and later called to have the water turned back on in my name (I will be making the water payments from now on). Everyone I have spoken with so far has been giving me a pretty hard time. They are saying they may refuse turning the water back on as long as this tenant lives at this address. Someone in the City Attorney's office even told me that after te $1400 is discharged, they will place a lien on my property. This sounded absurd but I didn't try to argue. I just want to get the water turned on and then deal with the rest later. Does anyone know if the city has a leg to stand on here? What if they refuse to turn the water back on?!?!?! This is my first post and any help would be greatly appreciated...Chapter 7 07/30/2008
341 09/17/2008
Discharge 11/21/2008
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Thank You!
Thanks for the replies everyone! Especially to StartingOver08... the way I read the link appears to suggest that the legislature put an end to the water utilities' power to place liens on the LLs property based on their tenants debts in the early 1980s. If the 2nd link is to an Oregon law, then the aformentioned legislation still stands. Where did you find the link???
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This is tricky. We are dealing with the same thing in my community at this moment. Historically, our city code has made landlords, not tenants, legally responsible for utilities provided by the city. Even if the utilities were in the tenant's name and paid directly by the tenant. Our new mayor has vowed to change this practice and has proposed a new ordinance to do so, though it hasn't passed yet.
You need to find an attorney who is familiar with the local city or county code. Because your exactly liability is going to depend on what that code says.So the poor debtor, seeing naught around him
Yet feels the narrow limits that impound him
Grieves at his debt and studies to evade it
And finds at last he might as well have paid it.
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You might want to Google the minicipal code for the city of Delray. Many are in PDF format. Then search through the code to see if you can find any info for the water district and liens by utilities or the water district. If the property is outside of city limits, Google the appropriate county code and check there.
It seems that the lien would have to be in place before discharge? Wouldn't it ?( calling all Gurus) If the debt was discharged before a lien was recorded wouldn't the discharge beat the lien to the punch so to speak?
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Originally posted by dingdong View PostIt seems that the lien would have to be in place before discharge? Wouldn't it ?( calling all Gurus) If the debt was discharged before a lien was recorded wouldn't the discharge beat the lien to the punch so to speak?
It would be, simply, a violation of the automatic stay and subject to sanctions and penalties. This is covered by 11 USC 362(a)(4), (a)(5), and (a)(6). While 11 USC 362(b) exempts some statutory liens, it only does so for things that become due after the filing of the petition; on debt incurred after the filing of the petition. 11 USC 362(b)(18).
I'd probably just file a Motion for Entry of Order to Show Cause and for Sanctions under 11 USC 362(a)(4) through (6).
Also, just as a reminder... liens survive Bankruptcy. You will have to get the lien voided if it was improperly recorded.
Also, you may want to read 11 USC 366... it's all about utilities and their rights during a Bankruptcy. They actually have more rights than most creditors! However, 11 USC 366(a) is very specific about what they can't do... and that is refuse service because of the filing of a petition or a debt prior to the filing of the petition.
You need the Court's equitable authority to deal with the Water "Authority" for sure! Nothing will get them moving faster than a hearing to Show Cause.Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
Status: (Auto) Discharged and Closed! 5/10
Visit My BKForum Blog: justbroke's Blog
Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.
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