Rain City Guide

Something we’ve always done with our client’s contracts is to make sure that a NWMLS Form 22K is used to help facilitate closing out utilities at the closing of the transaction. Why, you may ask? Doesn’t the seller have to change it over and the buyer has to put the utility in their name? Well, that is partly correct.

What many people don’t realize is that utility services that are owned by government entities (such as Seattle City Light) may lien a property for unpaid utility bills. That’s right - the property is liened and not the individual who racked up the bill. This is where 22K comes into play. The form is submitted as part of a residential or 2-4 multi-family unit contract and the default date for the seller (or their agent) to respond is 5 business days from mutual acceptance of the contract.
Once the information is submitted back to the buyer, buyer’s agent, and escrow then a little more goes on in the background that buyers and sellers never see. The escrow company, by use of this form, is then instructed to get the information from the lienable utility companies (note how I say specifically “lienable”) for final payment of the bill at Closing, or as of the Closing date.

From a practical perspective on the HUD Settlement Statement a seller will see a holdback amount that will cover the final utilities. If an overage is held back then a refund will occur after closing to the seller. Most escrow firms will hold back anywhere from $100 - 500 from what I’ve seen but it all depends on the property and how many lienable utilities there are to close out. If you don’t think that sellers might leave a buyer in the lurch, get ready to change your mind. We’ve had several clients that had used different agents on prior purchases and they got stuck with bills anywhere up to $500. It happens… try to keep it from happening to you.

Oh, and for those of you with rental properties in the City of Seattle, the policy for a tenant moving out is the same. Be sure to know the terms of RCW 35.21.290 and SMC 21.04.250 the same as a seller/buyer. For water bills the lien is directly against the property no matter what. For electric bills the landlord becomes responsible *unless* City Light is notified within 10 working days of changes in occupancy or in the acount-holder’s name. Both landlord and tenant can notify City Light of the move-in/move-out dates. Read more about bill paying responsibilities here on the City of Seattle website.