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Who Pays for the Sewer Capacity Charge?

Ryan Halset - 412 - HalfSEWAGE TREATMENT CAPACITY CHARGE:

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!

Ryan Halset

Ryan@BoardwalkSeattle.com

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4 Responses

  1. I had been renting my house for a few years, that had a large lot as part of the property. The owner of the property built two houses on that lot. During construction of the new houses, we were connected to the sewer, as the house was previously on septic. We realized our water bill would basically double being on sewer, and we accepted that. We purchased the house a few months ago, and without warning I get a 10,000 bill from King County wastewater division. I don’t understand how I owe this much. Do the two new houses also get this bill? Or should it have been split between the three houses? Any help or guidance would be greatly appreciated.

  2. Hi Jason,
    Based on the information you gave, it’s likely that you owe roughly $10k for the sewer capacity charge (you should verify this with King County). The two new homes will each owe the sewer capacity charge as well. However, you should be able to pay this over a 15 year period rather than all at once. Per the article above, the terms of your purchase and sale contract would dictate whether or not the seller would have paid the capacity charge off as part of the sale. Did you work with a real estate agent in your purchase?

    • We unfortunately did not work with an agent. We trusted the seller, and this was our very first purchase. This house had been on sewer for at least 6 months before we closed on it. I just can’t understand why it wasn’t disclosed to us at escrow if nothing else.

    • I see…yes, that’s frustrating. If it helps: a buyer would typically take over that sewer capacity charge anyways…but I completely understand – you want to know what you’re signing up for.

      I will note that in my experience, I have seen that most escrow companies will send a questionnaire to the Sewer Capacity charge department. If the questionnaire comes back with a charge and the buyer is responsible for assuming the charge (per the purchase agreement), escrow typically has a disclosure in their escrow instructions that the buyer needs to initial to acknowledge this charge.

      It may also help to know that if you sell the property prior to the charge being paid off, you can have the new buyer take over the remainder of the sewer capacity charge…just something to keep in mind if/when the time comes.

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