QUESTION

Florida real estate law to escrow funds for utilities at closing

Asked on Jan 04th, 2017 on Residential Real Estate - Florida
More details to this question:
The closing agent wants to escrow $400+ for utility bills against the property by former owners or tenants that are not mine, have not been made by me. The property has no outstanding liens, utility or otherwise. I told him he was acting outside his authority. That is is not my responsibility to ensure the "new owners" are credit worthy, nor do I have a responsibility to pay someone elses debt. That I am responsible for all liens and encumbrances on the property to which there are neither.
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1 ANSWER

Asset Protection Attorney serving Vero Beach, FL at Charles H. Sanford Law Offices P.L.
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Dear anonymous, Unpaid utility bills can operate as a lien against the property per Chapter 159 Florida Statutes. Title policies often provide the following exception: "Any lien provided by County Ordinance or by Chapter 159, F.S., in favor of any city, town, village or port authority, for unpaid service charges for services by any water systems, sewer systems or gas systems serving the land described herein; and any lien for waste fees in favor of any county or municipality." Certainly you don't have the responsibility to pay for someone else's debt, but that doesn't change the fact that there is a lien for unpaid utlilities. You may file an action against former owner or tenant for damages. If lien was from former owner you could file a claim against your title insurance carrier assuming the above exception was deleted from your policy.  Title agents routinely check for unpaid utility fees. The buyer can't get clear title unless lien is released and I assume that your sales contract gives the buyer the right to deem such lien a title defect.  
Answered on Jan 05th, 2017 at 6:59 AM

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