What is a Sewer Capacity Charge?
Since 1990, a “capacity charge” on new connections has been levied to new customers who connect to the sewer system, which these customers pay in addition to their monthly sewer bill. The capacity charge helps to cover the cost of sewer improvement and expansion projects needed to serve new growth.
How Much is the Sewer Capacity Charge?
King County sends capacity charge bills to property owners about three months after connection to the system and then every three months for 15 years or until the bill is paid in full (at the time of this writing, the charge is $53.50/month). Many times sellers forget they even have this bill as it does not show up as a lien on title unless it is delinquent. It is also not listed as a utility in real estate forms.
In a Real Estate Transaction, Who Pays for the Sewer Capacity Charge – the Buyer or Seller?
Now, if you’ve searched for an answer on who pays for this, the answer is…it depends.
The bill can be thousands of dollars so it’s important to address. Customarily, the buyer would take over the payment after closing. However, in previous buyers markets (we are currently in a seller’s market), I have worked on transactions where the seller agreed to pay that off as part of the sale.
If you are working with an agent and using standard Northwest MLS forms, you should make sure you inquire about the charge and check the appropriate box on line 16 of the Purchase and Sale Agreement: “16: Charges and Assessments due after closing: ____assumed by buyer ________ prepaid in full by seller”
If the “assumed by buyer” box is checked, then the buyer is agreeing to take over this bill. If the “prepaid by seller” box is checked, escrow will show this as a charge to the seller and pay it off at closing.
Click Here for further info: http://www.kingcounty.gov/environment/wastewater/CapacityCharge.aspx
I’m tearing down an existing home and building a new home, will I be assessed a new sewer capacity charge?
Typically there is a sewer capacity charge for new construction, but what about tearing down an existing house that was already connected to the sewer and building a new house in its place? Below are 3 scenarios you might find helpful.
1) If a home that was connected to both water and sewer is torn down and replaced with a single family dwelling within 5 years, it would be exempt from the capacity charge.
2) If the home is not hooked up within 5 years, it is considered a “New Hook Up” and must pay the appropriate charges.
3) If a single family home that was hooked up and is torn down and replaced with a 4 unit condo or 4 unit short plat with improvements such as town homes, it will be given a credit of one single unit and 4 new units will each be discounted 25%
Again, click here for further info: http://www.kingcounty.gov/environment/wastewater/CapacityCharge.aspx
I hope this helps and please don’t hesitate to let me know if you have any questions!