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LafayetteLady -> RE: Termy asks fir legal advice, really ? (5/24/2011 6:53:40 PM)
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As Hillwilliam said, utilities are unsecured. They are also attached (here in NJ) to the account holder, not the residence. Now I make no claim to know Ohio law, but think of it this way...
The electricity, i.e. power lines, outlets, etc., are part of the house. If you move you don't take those power lines with you, although through inspection, the seller does have to, to some degree, guarantee that they are in working order (depending on type of sale). If the seller had an overdue electric bill of several thousand dollars (quite possible with electric heat), the new owner isn't prevented from having the power turned on in the new owner's name because of the previous owner's failure to pay.
Same thing with cable, natural gas, propane, heating oil, even telephone lines (yes some people still have landlines). The previous owner not paying for those services doesn't prevent new owner obtaining those services.
Some utilities go towards habitability, others do not. A house without running water, heat, septic or sewer is not habitable by law. The electric company is not permitted to cut the power for overdue bills during the winter months.
So how then, can the local water company refuse service to new owners for unpaid bills of previous owner and why does the title company not find them?
It would seem to me, that the title company should be held liable, but since the past due water bill doesn't prevent clear title, it creates a type of loop hole.
The easiest solution would be for prospective buyers to do some of their own checking prior to sale, with contingencies that will void the sale. I say this, since you say that it has happened on multiple occasions. Certainly, the people telling you this Termy, could be leaving out pertinent information, but if taken on its face, with your statement it has been reported on the local news, the liklihood seems that it happened.
Title searches came to be necessary because inicidences happened where others had claims to property and the new owners lost their new purchases. Such is how most law or procedure comes into being. If I were a realtor in that area, I would find that information from my sellers before becoming the listing agent. As the buyer's agent, would do the checking with the listing agent and recommend the buyer do their own research. Buyer's look into (or should) every important detail when looking for a house. Is the house cable ready, in area with good schools, crime rate, etc. It is not uncommon for buyer's to call the electric company, gas company, oil company, etc., to get an idea of what has been spent for those services by previous owners to determine if the utilities will fall within their budget.
"Buyer Beware" does not exist in home purchases any longer. If the seller knows of problems, those problems must be disclosed. Some things, like new roof, new septic are disclosed as a selling point. Other things, like a mass murder took place in the house (first thing that came to mind), or that the basement regularly floods must be disclosed or the owner faces liability. Of course that liability exists only if the new owner can prove the seller was aware, but in the case of an unpaid water bill, the seller is of course going to know. So if a savvy buyer asks directly, "is the water bill paid and up to date?" and the seller says yes, then the new owner can go after the seller for reimbursement. I think in most cases, even if the question was not asked directly, the buyer could file suit against the seller when this happens.
Termy, if these are friends of yours, it sucks to be them. However, they are not left with no recourse, only the job of figuring out who to sue. Depending on the amount they had to put out, they look at the deepest pockets, which would of course be the title company.
I do think that you have a valid point that someone should take it to court and make an issue of it. That would be the best way to prevent it from happening to others.
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