Who is responsible for past electricity bills if seller hasn't paid them

Hi
I am buying a short sale and owner probably hasn't paid past electricity and water bills.
Who will be responsible for past bills after the close?
Do I need to inform city or PG&E about the closing date?
How does it work?


regards
rbharol
  • October 19 2011 - US
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Answers (6)

i tell my client if you have any concern bring attention to your agent who is representing you. best thing to do get everything in writing .

Omar Khamisa
Mortgage Loan Manager
People's Choice Mortgage Group
NMLS # 369325
DRE # 01891360
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  • October 22 2011
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The person/entity who opened the electrical service account is responsible. That could be the Selling Lender, or the foreclosed former owner. In 9 out of 10 foreclosures, if the lights are on, it is because the Lender, who is now the Seller, has transferred the utility account into their name. In 9 out of 10 short sales, if the lights are still on, the owner of the home is still paying the bill.
  • October 22 2011
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This needs to be addressed at the beggining stage of the transaction.  The Bank is always willing to cooperate if the buyer is already qualified and is able to provide a DU approval.  Most of the time they will reduce the agreed opurchase price equivalent to the outstanding balance, if the buyer is able to bring cash to the table.  Depending on how long the property has been on the market will determine how much they are willing to contirbute.
  • October 22 2011
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Profile picture for Ofe Polack
I had a couple of short sale closings in the last few weeks and the utility bills were part of the lender's HUD.  Usually the title company will obtain readings from the utility companies prior to closing.  In some states you can find the water and sewer bills on line. After the closing the buyer is responsible for the bills, that is the reason you need to ensure that they go on the HUD on the seller side.  
  • October 19 2011
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Profile picture for Connie Klemme
you do sometimes have to pay for a new meter to be set if it has been removed.  You also may be required to pay for a meter base inspection from the city before a new one will be set- those are expenses you wouldn't have if the seller had an active, updated account. but they don't charge you for the seller's balance.

It's best to call early  for scheduling utilites on so you can find out what kind of deposit you will need in addition to any fees regarding a meter if it's been removed. 
  • October 19 2011
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Profile picture for sunnyview
I would call PG&E and inform them of the sale. I am sure they have a process that they follow. Usually with electricity, they just start a new bill for the new owner and then try to collect the past bills from the old owner.

Water and sewer bills tend to follow the property so you need to make sure an include any past due bills like that on your HUD closing statement to make sure they are paid or they may follow you. You can ask your agent about both those issues. They should be able to help.
  • October 19 2011
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