City Utility is Aaaangry!

[emilfleysher]

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...

[dingdong]

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.

[StartingOver08]

It may depend upon how the utility runs their operations. According to this link, if the water has been provided the utility has the right to lien the property when a tenant is delinqent in utility payments.

http://myfloridalegal.com/ago.nsf/printview/D1D550F518EA41E185256576005C704F

http://www.leg.state.fl.us/Statutes/index.cfm?mode=View%20Statutes&SubMenu=1&App_mode=Display_Statute&Search_String=&URL=CH0180/SEC135.HTM

[dingdong]

That link you posted is for the state of Oregon.
Although Florida may have similar laws.

[StartingOver08]

Sorry DingDong...I was doing some research and obviously hit the wrong link!

[dingdong]

It is probably a helpful link, if Oregon does it, then Florida probably has the same situation if the clerk at the Florida utility dept stated the issue with the lien applying to water bills.

[Trixie007]

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.

[TEW]

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...

Did you give them a case number? they can put all the liens on they want. they will be wiped out in the BK If she has filed and they will not turn on the water that is a violation of stay. she will need to give them a deposit that's a cleaner way to do it.

[emilfleysher]

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???

[Dst1]

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.

[dingdong]

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?

[justbroke]

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?

Even more restrictive, is that they can't record a lien between the actual filing and the discharge. I say this because they can't lien a discharged debt... and... since they can only lien a post-petition debt... it's highly unlikely that you could run up such a debt and get a lien, in less than 60 days.

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.