Bulletin: NY000067

Dear Associates:

There has been a great deal of misunderstanding recently, with reference to the question of whether sewer searches should be run on properties located in Suffolk County, and the manner in which these searches should be treated, if they are run. Such searches are available from the downstate firms which already provide municipal departmental searches and tax searches.

Unpaid municipal sewer hookup and assessment charges are a lien on the real estate at the time they become due and payable (see the "Sewer Rent Law", General Municipal Law §452), and are also in Suffolk County relevied with the Town Tax if they remain unpaid. (In other areas, depending on the local law, the sewer rents may be assessed with the Town Tax, as outlined in General Municipal Law §452(4).) While unassessed charges may cover periods of time which may predate the issuance of our policy of title insurance, it is the position of this Company that the policy forms currently in effect do not provide coverage over these unassessed items, but only to the extent that they have not been assessed, i.e., become due and payable. See, for example, Exclusions from Coverage 3(d), which specifically excludes liens attaching or created subsequent to Date of Policy.

In an effort to bring some order to the situation, since searches are now available to be made for these items, we now require that when a title order is placed for Suffolk County property, that a sewer search be done as part of your regular tax search package.

Please note that the search should be treated as part of the tax search. Charges which have not yet become a lien should be excepted on the search.

In other areas of the state where there are municipal water and/or sewer districts, and tax searches are provided as part of the closing package, the search that is made should include municipal water and sewer rents and charges.

Counsel's Corner:

Subdivision 3 of General Municipal Law §452 reads as follows:

3. Sewer rents shall constitute a lien upon the real property served by the sewer system or such part or parts thereof for which sewer rents shall have been established and imposed. The lien shall be prior and superior to every other lien or claim except the lien of an existing tax, assessment or other lawful charge imposed by or for the state or a political subdivision or district thereof.