Opinion ID: 2295141
Heading Depth: 1
Heading Rank: 4

Heading: WASA's Authority to Bill Euclid Street for Delinquent Tenant Accounts and File a Lien Against Euclid Street's Real Property

Text: Euclid Street's appeal requires us to decide two closely related issues, namely, whether WASA is authorized to: (1) bill a building owner directly for water services after a tenant who was authorized by WASA for direct billing has failed to pay water service fees; and (2) file a lien against the property where the water services were rendered if the owner fails to pay the fees that have been billed to the owner as a result of the tenant's delinquence. Our affirmative answer to the first question leads to a similarly affirmative answer to the second question. The parties agree, as do we, that the principal statute at issue is D.C.Code § 34-2407.02, which provides: [I]f an owner of real property fails to pay District water and sanitary sewer service charges in full accordance with § 34-2407.01, for all bills rendered which remain unsatisfied for 60 days or more the Mayor may file a certificate of delinquency with the Recorder of Deeds. . . . Upon filing, the certificate of delinquency shall constitute a continuing lien against the real property. . . . D.C.Code § 34-2407.02(a)(1)-(2) (2001) (emphasis added). WASA (and the trial court) relied on this statute as authority for the validity of the lien WASA filed on the property at 1460 Euclid Street. Euclid Street responds, however, that WASA cannot hold an owner responsible for a tenant's overdue account once WASA has agreed to collect from the tenant directly. In support, Euclid Street cites WASA's regulations that create a tenant's right to receive water bills in his or her own name. We disagree with Euclid Street, and conclude that the relevant statutes and regulations, taken together, establish that the obligation to pay WASA's water service charges runs with the property where the water services are rendered. Therefore, WASA was authorized to bill the owner of the property, Euclid Street, for the delinquent tenant accounts, and had the further right to file a lien against the 1460 Euclid Street property after its owner refused to pay.
We begin our analysis with an overview of the regulatory framework that gives WASA the authority to bill a tenant directly for water services and describes the consequences of a tenant's failure to pay for those services. Pursuant to 21 DCMR § 428.1 (2010), WASA is authorized to permit tenant(s) to receive the bills in their own name when the owner of the property has failed to pay its own account in full and WASA determines that it is practicable to bill the tenant directly. WASA's practicability determination requires a finding that it is feasible to install a meter in each unit in an apartment building or, if that is not feasible, that there is a tenant group or association able to assume responsibility for paying the building's water service fees. See 21 DCMR § 430. Thereafter, WASA will read the meter on service at the affected address and render a final bill to the owner. . . . 21 DCMR § 428.3. Once WASA begins to bill the tenants directly, [i]f water and sewer charges incurred by the tenant(s) remain unpaid for more than thirty (30) days after the rendering of a bill for the charges, penalties and interest shall be applied to the tenant's outstanding charges, and water and sewer services may be terminated. 21 DCMR § 428.4. [S]ervices shall not be restored until all charges, penalties, interest and fees for the property are paid in full. 21 DCMR § 428.6. 21 DCMR § 432, titled Tenant Payment of Water and Sewer Service Bill, sets forth the procedures that WASA must follow when a tenant or a tenant association fails to pay WASA's water service fees. Section 432 states in full: 432.1 The General Manager may terminate water and sewer service to the premises of a tenant who has agreed to accept responsibility for payment of water and sewer services charges individually or with a tenant association when the tenant or the tenant group or association is delinquent in payment. 432.2 The rights of the tenant group or association shall terminate upon the occurrence of any of the following: (a) The failure to make timely payments; (b) The failure of the tenant group or association to maintain bonding; (c) The failure of the tenant group or association to keep adequate records; or (d) The failure of the tenant group or association to obtain the consent of all the premises' tenants, including the consent of all tenants who move into the premises after the account is established. 432.3 Upon termination of the tenant group or association's account, WASA shall bill the owner of the property directly for water and sewer charges. 21 DCMR § 432 (emphasis added). The statute that governs the District's water assessments and rates does not discuss procedures for metering apartment units individually or billing tenants directly. However, the statute does state that WASA may terminate water service if the owner or occupant of a building or apartment fails to pay a water bill within thirty days. D.C.Code § 34-2407.01 provides, in relevant part: The Mayor of the District of Columbia is authorized to provide for the collection of water charges, in advance or otherwise, from the owner or occupant of any building, establishment, or other place furnished water or water service by the District, and to shut off the water supply to any such building, establishment, or other place upon failure of the owner or occupant thereof to pay such water charges within 30 days from the date of rendition of the bill therefor. Such authority to shut off the water supply may be exercised by the Mayor regardless of any change in ownership or occupancy of such building, establishment, or other place. D.C.Code § 34-2407.01(a) (2001) (emphasis added). As discussed above, the statute further provides that, in addition to shutting off service, as part of the authority to provide for the collection of water charges. . . from the owner or occupant, WASA may file a continuing lien against a property after the owner has been sixty days delinquent in paying for all bills rendered. See D.C.Code § 34-2407.02(a)(1)-(2).
We think the language of the statute and regulations, read together, establish that although WASA provides some accommodation for direct billing of tenants, the obligation to pay fees owed to WASA reside with the owner of the property to which services are provided. In essence, the obligation to pay runs with (and can be secured by a lien on) the property where the water services were rendered. Therefore, the property owner's obligation to WASA is not terminated because the tenants receive bills in their own name. This conclusion is supported by statutory language. For example, D.C.Code § 34-2407.01(a) states that WASA's authority to shut off the water supply [for failure to pay] may be exercised. . . regardless of any change in ownership or occupancy of such building, establishment, or other place, and D.C.Code § 34-2407.02(a)(2) provides that the filing of a certificate of delinquency shall constitute a continuing lien against the real property. Euclid Street relies on 21 DCMR § 429.2, which refers to a tenant's assumption of  prospective financial responsibility, and 21 DCMR § 428.3, which states that WASA shall render a final bill upon the owner after WASA has agreed to bill the tenants directly, in support of its argument that the responsibility of the owner of an apartment building ceases with respect to tenants' outstanding water and service fees once they have been directly billed to the tenants. Although the language selected by Euclid Street from these regulations provides some support for its position, it does not persuade us, when examined as a whole, it is best interpreted as setting out the mechanics for transferring to a direct billing of tenants. A broader construction would not be consistent with the governing statute's focus on the owner of the property where water services are rendered, not the individual tenant who receives the bill, and the remedies for payment. Significantly, the regulations appear to allow tenants to arrange for direct billing in their own name primarily as a means of ensuring a continuous water supply when the landlord has previously been delinquent in paying WASA's fees. See 21 DCMR §§ 428.1, 430.1. But rather than removing the owner's responsibility for paying for water services to the property, as Euclid Street would have us conclude, the regulations set forth procedures for tenant billing that are properly understood as a complement to the owner's ultimate obligation to pay for the water services. Thus, 21 DCMR § 428.6, which discusses termination of water services for failure to pay, provides that water service shall not be restored until all charges . . . for the property are paid in full. (emphasis added). Likewise, 21 DCMR § 432.3 states that WASA shall bill the owner of the property directly when a tenant association's account is terminated due to delinquency; implicitly, the same procedure should follow when an individual tenant's account is terminated due to delinquency. 21 DCMR § 427.1, which describes WASA's procedures for enforcing a real property lien, states that when bills for water and sewer services are more than sixty days overdue, WASA shall provide the owner of record with a written notice of intent to file a lien. Importantly, § 427 does not specify that the bills must be in the name of the owner, instead of the tenant. [9] If, as Euclid Street argues, WASA could collect water and sewer fees only from a tenant (once it has agreed to direct billing), then when the tenant fails to pay, WASA would be left with two extreme options: shut off the service entirely pursuant to D.C.Code § 34-2407.01(a), or hold an unsecured debt that would require initiation of a collection action against the tenant. This result would be at odds with D.C.Code § 34-2407.02, which gives WASA the power to file liens against the real property for all bills rendered which remain unsatisfied over sixty days. We conclude that WASA was authorized to bill Euclid Street for the delinquent tenant accounts and to file a lien against its property when Euclid Street refused to pay amounts that had been overdue for more than sixty days.