The proper allocation of water and sewer rent charges, at the time of closing, can be difficult in NYC.  This can be attributed to the DEP's ongoing effort to install meters on all NYC properties and to DEP billing for meter usage AFTER the service has been provided.  The billing method on properties without meters (ANNUAL FRONTAGE) is on an annual basis and is PREPAID.

Residential Properties

Since billing for metered accounts is done AFTER the service has been provided, it is necessary at the time of the property transfer to collect from the seller, money for usage up to closing.  New meter installations can cause the following problems;

CASE I - THE NEW METER IS NOT BEING BILLED AND THE PROPERTY CONTINUES TO BE BILLED ON ANNUAL FRONTAGE

It would be wrong to pro-rate the pre-paid annual charge to "date of closing" to determine seller and buyer responsibility.  Depending on the number of residential units, DEP may bill the meter back to the installation date of the meter.  Any annual frontage charges that have been previously billed and overlap meter billing periods, would be cancelled.

CASE II - THE NEW METER IS BEING BILLED ON "ESTIMATED" READINGS

It would be wrong to use the meter's "estimated" charges and "periods covered" to determine seller and buyer responsibility.  Where there are "estimated" readings DEP may go back two years to adjust billing, based on subsequent "actual" reading.

Commercial Properties

"Final" meter readings are recommended on all commercial properties being sold.  It not only legitimizes the "Innocent Owner" defense against back billing prior to ownership but also protects against unbilled meters which may be "lost" in DEP records but are in use on the property.  After a "Final" meter reading, DEP could only charge for "lost" meters from date of ownership.