When purchasing a home, a water and sewer certification plays a critical role in ensuring you don’t inherit any unpaid utility bills linked to the property. This official statement, issued by the local municipality or utility authority, details whether the water and sewer accounts associated with the property are current or have outstanding balances.
The process typically involves the title company, real estate attorney, or seller’s agent requesting the certification from the utility department shortly before closing. The utility provider verifies the account status and issues a certificate indicating either a zero balance or the amount owed. This document helps identify any debts that must be settled at closing, often deducted from the seller’s proceeds, thus preventing surprise liabilities for buyers.
Unpaid water and sewer bills often create a municipal lien—a legal claim against the property itself rather than just the individual owing the debt. This means if debts aren’t cleared prior to sale, the lien remains attached to the property and can result in collections or even foreclosure actions against the new owner. For a comprehensive understanding of these liens, see our glossary entry on Municipal Lien.
Typically, sellers are responsible for paying off any outstanding utility balances identified by the certification. Buyers should confirm that the certification has been obtained and reviewed before closing, as lenders usually require proof to protect their investment. Title companies or attorneys coordinate obtaining the certification and handling any required payments during the closing process.
Common misconceptions include the belief that utility companies will pursue previous owners for unpaid bills—municipal liens commonly transfer responsibility to the property’s new owner. Additionally, a final utility bill differs from a water and sewer certification; the latter is a legally recognized document verifying the property’s complete utility account status.
To facilitate a smooth closing, sellers should proactively check and clear any utility debts before listing their property. Buyers should ensure their agent or attorney includes the water and sewer certification on the closing checklist.
For more details on closing costs involved in real estate transactions, you can refer to our page on Closing Costs.
For authoritative information on water and sewer certifications, visit City of Philadelphia’s Water and Sewer Certification.