Missing water meters make home purchases difficult
Since the beginning of the housing slump buyers, sellers and agents have faced unfortunate and unique situations when it comes to completing a transaction.
For Auburn resident Tony Jackson, he uncovered one more roadblock when he tried to get a home inspection for a short sale house he wanted to buy.
His troubles came when he found out there was no water meter connected to the home, thus making an inspection difficult because the inspector could not turn on faucets and flush toilets to make sure the plumping works.
After an initial investigation, Jackson found out he would have to pay more than $1,000 to the Placer County Water Agency to have the meter hooked back up and have water service, just so he could have an inspection.
"Initially, it was like, OK there's got to be some sort of way around this. They have to have an avenue B," Jackson said in regard to the fee. "Initially it was more along the lines of somebody didn't ask the right question. I just told (Realtor) Don (Rolfe), ‘let me talk with them and see if we can get them to waive this.' I didn't put much weight into this, I guess."
At first, there didn't seem to be an "avenue B" for Jackson. He said he was told he would have to pay the large fee to get the meter put back in, and that the timeframe might be 30 days or longer for installation.
More missing meters popping up
Jackson is not alone when it comes to vacant homes for sale missing their water meters. This happens for two reasons, according to PCWA. One is that the bill was not paid by the owner, or two, the owner has requested that service be turned off when they are not living in the residence.
But for buyers and agents, it's still an inconvenience.
"Yes, I have and it's horrible," said HomeTown Realtors owner Sue Thompson in reference to whether she's run into the problem of missing water meters. Thompson said in the last year, she's had three properties that didn't have water meters connected.
"I don't consider it an epidemic, but I do consider it something you need to be cautious about and aware," Thompson said. "And one of the best things that the listing agent can do is find out (if the water meter is missing) and disclose that in the confidential remarks to the agent that's working with the buyer and the agent can then prep the buyer."
The water agency policy for removing the meters, according to PCWA Deputy Director of Customer Services, Richard Cutlip, is that after 180 days of non-payment on a bill, the agency sends out one more notice to the owner of the property, which gives them another 30-day period to pay. If after this total 210-day period the bill is not paid, PCWA removes the meter.
"The discontinuance is actually filed at the county. There is a record of that before any purchase of a home," Cutlip said. "They will know that it has taken place. We actually do file with the Placer County Recorder's Office. It is public record."
Banks play a role in non-payment
Cutlip said when bank-owned homes have the meter removed, it's usually because the bank has not maintained the payment of the bill, or had a representative take care of it.
"This is most common during a foreclosure process," Cutlip said. "Usually, if the bank does not take responsibility of the property, the bills don't get paid for 180 days. Then we send another notice after the 180 days for 30 days for them to get the bill paid."
Thompson agrees that paying the water bill is sometimes last on the list for lenders.
"It's not on the checklist, the only thing on their checklist is the insurance," Thompson said.
But for Jackson, the fees seemed excessive, and he and Realtor Don Rolfe, of Rolfe Realty Group, who is working with Jackson on the property on Finley Street, have felt that one more large fee in this market makes it that much more difficult to get a transaction done.
"In my opinion it's slows down the market," Rolfe said. "Because unless you're doing a conventional loan or cash, you have to have running water, a heater, a stove, these are all basics that FHA (Federal Housing Administration) loans have to have."
Why do fees cost so much?
Cutlip explained that the standard fee to install a water meter again is roughly $300, but on top of that there are water connection charges (WCCs) as well as hookup fees. The WCC fees are where a bulk of the bill might be made as rate payers have to pay the difference from the previous rate to the current rate to compensate for the maintenance of PCWA's water system. Cutlip said the minimum to put a meter back in is $500, but the average is about $1,100, depending on the pull date of the meter.
"Our interest is not to hamper the housing market and real estate agents, we do follow our rules and regulations per our board of directors' guidelines," Cutlip said. "We want to make sure our water is available to all our parcels. We would be willing to work with the local Realtors to make the process as easy as possible."
For Jackson, who was becoming resigned to paying the fee in order to continue the transaction on his second home, stopped in at Thursday's public meeting by the PCWA and presented his situation. After his public comment the Board of Directors asked staff to work with Jackson, who is now having the meter put back in for a cost of roughly $100 so he can have his home inspection done.
"The installation was based on time and materials, we had an estimate of time and materials at $100. It's right in Downtown Auburn. We did a quick calculation," said Joe Parker, Director of Financial Services with PCWA. "We wanted to provide him with a quick fix. ... We are going to look at rules and see if there will be modifications. That's going to be an ongoing situation in the near future."