LID/Sewer Assessment vs District Extension - Posted by Dianna
Posted by Dianna on July 07, 2002 at 01:44:16:
Bought some land in Seattle from an individual. The land was/is vacant. We bought title insurance and the title was clean.
Now, 2 years later, we’re in the process of selling and we get “word” that we have a sewer assessment. I go to the local sewer district office and check and they assure me that there isn’t anything outstanding. I check the county records, and I call the county assessors office. Nope. No assessment.
I get “word” again, that we have an assessment (none on title). So, I do the same thing all over again. Nope at the recorders. Nope at the assessors office. However, this time the local sewer district the guy is “dancing” around the answer…I get called back into an office and delivered a well-rehearsed, legally correct speal…then officially served with a $20K assessment – a piece of paper with a bunch of a calculations and the words “charge in lieu of assessment” (by the way, that’s more than we paid for the property). It gets better…of the $20K, $9K is interest and penalities from 1994! Yep, they sent out 1 letter – yes, only one – in 1994, and therefore they are entitled to these late fees. I told him that in the real world, you are more likely to get paid if you actually record the assessment. He assured me that they would be paid, if I wanted to do anything with my property. I found out the entire neighborhood has these assessments, and only 2 property oweners have paid to date. (Note: the charge is specifically for bringing the sewer lines in front of all the properties and stubbing it off. It is not for the hook-up fee’s – that’s a 3rd party cost of approximately $15K --we had anticipated that fee)
So, I leave, and immediately called my title company and told them the situation. They call the sewer district and then call me back to inform me that my title insurance won’t cover a “district extension hook-up.” I said, “a what?” I explain to title that it’s an assessment. If it walks like a duck and talks like a darn duck, it’s a duck! Title replied, that “no, those are district extension hook-up fee’s” according to the sewer department. Sewer dept. specifically said that it was not an assessment.
Hmmm…this is slick. Call it something different, so you only fight with us little property owners, that don’t have deep pockets and will find it hard pressed to pay an attorney to fight the assessors office. However, if they call it what it is – a sewer assessment – then they have to fight with the big, bad title insurance companies. Since they screwed up back in 1994 not recording it, it’s impossible for them to do it now. Now, it would be really hard for them to come in and record $15-$49K assessments against properties that have mortgages, because they would have the banks after them (since assessments are senior to all loans) So, they sit and wait for us little owners to find out that we have this “district extensions” and hope we will roll over and pay it. Title is happy, too, since it’s not an assessment and they don’t have to pay.
So, we’re only at the beginning of this…have any of you seen anything like this? Suggestions…
Dianna