Bulletin: GA2012008

Dear Associates:

This Bulletin will address the requirements for issuance of title insurance where the owner of the property has unpaid water and solid waste charges.

Single or multi-family residential property.  A public or private water supplier may impose a lien against real property to secure unpaid charges for water furnished only if the owner of the property is the same person who incurred the charges. O.C.G.A. §36-60-17(c). Federal Home Loan Mortgage Corporation v. City of Atlanta, 674 S.E.2d 905 ( Ga. 2009).  If the user of the water service is a tenant residing in single or multi-family residential property, then the water company must seek reimbursement from the person who incurred the charges rather than the real property. O.C.G.A. §36-60-17(b). These delinquent charges generally become the lender's obligation upon foreclosure. See Bowery Savings Bank et al v. Dekalb County, et al, 242 S.E.2d 50 (1978); Davis v. Weber , 597 F.2d 139 (5th Cir. 1974).  A water supplier may not refuse to supply water to a residence served by a meter because of the indebtedness of prior owner, occupant or lessee of the residence.  O.C.G.A. §36-60-17(a). 

Where a city or county provides for solid waste collection services, such as trash collection, garbage, refuse or other sanitary services, including water service, a city or county may enforce collection of these amounts due in the same way as they enforce and collect taxes. O.C.G.A. §12-8-39.3. Generally, county and municipal ordinances grant the same priority for delinquent water and sanitary service charges as liens for ad valorem taxes and may be foreclosed in the same manner. Therefore, the city or county may claim a lien against real property in relation to these charges without recording a Writ of Fieri Facias on the General Execution Docket in that county. Where the county tax commissioner does record a Writ, an examiner may not find it because the name of the person who incurred the charges is outside of the chain of title in many cases.

Company Policy: Given the current position of many local governments and private water suppliers in Georgia, we require all charges or amounts due for water services, solid waste or sanitary services on the property to be paid in full at closing. If these amounts are not paid in full at closing, you must include the specific exception in all policies as follows:

All assessments, taxes and special assessments which are now a lien or payable or which may become due and payable, including, but not limited to water bills and sanitary bills.

Where unpaid water charges are against a former owner in the chain of title and the lender requires removal of this specific exception, Issuing Agents should collect and appropriately remit payment for these billings.

Commercial or Non-residential Property.  While the city or county may not refuse to supply water services to residential property, there is no limitation on non-residential property.  Solid Equities, Inc., v. City of Atlanta, 710 S.E. 2d 165 (Ga. App. 2011).   The City or County has the authority to refuse service and to impose a lien against the property for a present or former owner's water charges as well as a present or former tenant's water service charges on non-residential and commercial property.  Id.

Company Policy:  Where there are unpaid water charges, solid waste or sanitary services and the lender requires removal of the above-referenced exception, Issuing Agents should collect and appropriately remit payment for these billings regardless of whether these charges were incurred by a tenant or owner of the property.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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