Many of our readers and most of our customers are buying and selling homes in King County, Washington. If you own a home built during the last 15 years or are looking to buy one of that age, chances are the home is being charged a sewage treatment capacity charge in addition to the monthly sewer bill. (Obviously only applies to homes connected to the sewer, not homes on septic tanks.)
What is the sewer capacity charge?
Since 1990, King County has been charging for new connections to the sewer system to fund growth of the sewage treatment system. If you install a new hookup to the city sewer anywhere in the King County service area, you are subject to this charge, payable over 15 years. You will get a separate quarterly bill from King County for this charge.
How much does it cost?
King County revises their rates every year, most likely in the upward direction. If you hook up a single-family house in 2012, it costs $51.95/month. In 2013, that goes up to $53.50/month. Multi-family connections (like townhomes) are slightly cheaper. So if you built a house this year and connected to sewer, $51.95/month x 12 months x 15 years = $9351.
Increases to the sewer capacity charge are not retroactive, so if you are buying a house connected to the sewer 5 years ago, the monthly rates are cheaper. You can get a discount for pre-paying the fee as well.
Dealing with the sewer capacity charge during sale of a home
The capacity charge is the responsibility of the current property owner, so if you buy a home that is in that 15-year period, you will likely inherit that bill from the previous owner.
Our standard purchase contracts in Washington state address this item as a point of negotiation. A buyer may request that the assessment of the sewer capacity charge is prepaid in full by the seller. A buyer can also assume the charge after closing. The escrow company closing the deal will pro-rate the charge appropriately between buyer and seller.
If a house is brand new, the 15-year assessment is a substantial amount of money. Few, if any, builders will pay this on the buyer’s behalf. The same can be said for homes that are only a few years old. A seller is unlikely to payoff the remaining 12-years worth of sewer capacity charge for a new buyer. As the building ages and the payoff amount goes down, it becomes easier and easier to try to negotiate for the seller to payoff the amount early.
A more important consideration to the buyer is how long they intend to own the home. Let’s say that a buyer is purchasing a 3-year old home that has 12 years of sewer capacity charge remaining. They negotiate for the seller to payoff the entire amount and then sell the property 5 years later. Effectively they have benefited future buyers, and they would have been financially better off to negotiate a different concession.
Sellers are required to disclose the existence of a sewer capacity charge, and buyers should assume that a newer home still has the charge. Keep in mind, even older homes can have a sewer capacity charge if they were recently converted from septic to sewer, though that is not super common.