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My niece purchase a "fixer-upper" house that had been empty for we-don't-know-how-long. I haven't had much success in locating Oklahoma law for this:

She went to the water utility to get service. They said that to get it turned on, she had to pay $800 for the previous months unpaid on the "perpetual contract."

The Oklahoma Corporations Commission says that they do not regulate rural water services, but the group they point us to is a non-profit association of such suppliers, not a governmental agency.

Web searches for various seemingly pertinent keywords get lots of hits but none of them that I looked at were relevant.

I'd appreciate some pointers to relevant statutes or cases.

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I am unfamiliar with a "perpetual contract" and that phase does not appear in any reported appellate court decision of the State of Oklahoma. However, usually unpaid utility bills do constitute a lien against the property that is enforceable against a subsequent purchaser, which has the same practical effect. This kind of obligation is also sometimes described as an "encumbrance".

Usually, in an arms length sale of real estate through real estate agents, a title insurance company is hired and is responsible for determining if there are any outstanding liens, pro-rating utility bills, pro-rating property taxes, etc. at closing. If the title company fails to find a lien and there is one, the title company is responsible for paying off the lien that it failed to find (although it can often force the previous owner to indemnify it for the payment it has to make).

It could be that since water service was not currently being delivered, that the title company did not search in the manner that it should have to find this lien, or it could be that there was no title company used and so no one ever checked.

Also, if the property was conveyed with a "warranty deed" such a deed contains a promise from the seller that there are no liens or encumbrances not listed on the face of the deed that have to be paid, and the seller has liability for breach of the warranty of title. But, if the property was conveyed with a "quitclaim deed" there is no such warranty.

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  • I suppose a conveyor who supplies a "warranty deed" will look closer than one who supplies a "quitclaim deed" since it is their own money that is at stake if they get it wrong. And I suppose the OP won't get any water until someone pays the bill.
    – gnasher729
    Commented Jul 4, 2017 at 9:11
  • I'm accepting this even though there is probably more to it. 60 O.S. 831 et seq. requires the seller to provide a disclosure if they have lived in it. Since the seller was the foreclosing company, they are exempt, but they did one anyway. Section 838 in confusing language appears to say the whole act doesn't apply in foreclosure. But in the contract, the seller "warranted" that it was "free of all liens and encumbrances." The water supplier doesn't have a lien, and I am not sure if this meets the legal definition of an encumbrance. But a lawyer my sister knows is looking at it.
    – WGroleau
    Commented Jul 4, 2017 at 20:40

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