OVERVIEW
Effective September 29, 2016, Chapter 363 of the Laws of 2016 amended the Public Authorities Law to add Section 1078-f (the “SCWA Law”). The Legislation enhances the method of collection of charges due to the Suffolk County Water Authority (“SCWA”) by empowering the SCWA with rights similar to those granted to municipal water districts. A link to the SCWA Law is provided here: http://www.advantagetitle.com/bulletins/assets/2016-07-1078-f.pdf

Effective September 29, 2016, Chapter 339 of the Laws of 2016 amended the Public Authorities Law to add Section 1197-r (the “GNN Law”). The Legislation enhances the method of collection of charges due to the Water Authority of Great Neck North (“GNN”) by empowering the GNN with rights similar to those granted to municipal water districts. A link to the GNN Law is provided here: http://www.advantagetitle.com/bulletins/assets/2016-07-1197-r.pdf

For purposes of the Bulletin, the SCWA Law and GNN Law are collectively referenced as the “New Law”.

BACKGROUND
The SCWA is an independent public-benefit corporation operating under the authority of the Public Authorities Law of the State of New York serving approximately 1.2 million Suffolk County residents. Previous to the SCWA Law, the SCWA wrote off uncollected water charges.

The GNN is an independent public-benefit corporation operating under the authority of the Public Authorities Law of the State of New York serving approximately 32,400 people in the northern areas of the Great Neck Peninsula, which encompasses the villages of Great Neck, Great Neck Estates, Kensington, Kings Point, Saddle Rock, portions of Great Neck Plaza and Thomaston, and portions of the unincorporated areas of the Town of North Hempstead. Previous to the GNN Law, the GNN wrote off uncollected water charges.

THE SCWA LAW
The SCWA Law provides that “all rates, fees and other charges for the use or availability of the facilities or services or commodities provided or made available by the authority…shall be a lien upon the real property upon which, or in connection with which, services are provided or are made available, as and from the first date fixed for a payment of such rates, fees and other charges. Any such lien shall take precedence over all other liens, or encumbrances, except taxes or assessments.” Furthermore, the SCWA has the ability to submit a list of properties “…from which the payment of rates, fees and other charges are in arrears for a period of ninety days or more after the last day fixed for payment of such rates, fees and other charges…” to the receiver of taxes who “…shall levy such sums against the properties liable…”

The Company has been informally advised that the SCWA Law was not enacted in time for the SCWA to submit a list of properties in arrears to levy into the 2016/2017 General Tax. So, the power granted to the SCWA to levy arrears pursuant to the SCWA Law will not impact Suffolk County General Taxes until the 2017/2018 General Tax. Nevertheless, any charges imposed by the SCWA pursuant to the SCWA Law are currently liens on real property with priority over all other liens or encumbrances with the exception of taxes or assessments.

THE GNN LAW
The GNN Law provides that “all rates, fees and other charges for the use or availability of the facilities or services or commodities provided or made available by the authority…shall be a lien upon the real property upon which, or in connection with which, services are provided or are made available, as and from the first date fixed for a payment of such rates, fees and other charges. Any such lien shall take precedence over all other liens, or encumbrances, except taxes or assessments.” Furthermore, the GNN has the ability to submit a list of properties “…from which the payment of rates, fees and other charges are in arrears for a period of ninety days or more after the last day fixed for payment of such rates, fees and other charges…” to the Nassau County legislature who “…shall levy such sums against the properties liable…”

The Company has been informally advised that the GNN Law was not enacted in time for the GNN to submit a list of properties in arrears to levy into the 2017 General Tax. So, the power granted to the GNN to levy arrears pursuant to the GNN Law will not impact Nassau County General Taxes until the 2018 General Tax. Nevertheless, any charges imposed by the GNN pursuant to the GNN Law are currently liens on real property with priority over all other liens or encumbrances with the exception of taxes or assessments.

IMPACT ON TITLE UNDERWRITING
Since the New Law grants SCWA and GNN with powers substantively similar to those held by a municipal water district, the Company will require a final meter reading from the SCWA or GNN, as applicable. Otherwise, the final title policy will contain an exception for any water charges billed and/or entered prior to closing. In the event a final meter reading is provided prior to or at closing, the final title policy will contain an exception for any water charges billed and/or entered subsequent to the date of the final meter reading.

Please contact Drew Steigler, Chief Underwriting Counsel, at
631.424.6100 or dsteigler@advantagetitle.com
with any questions concerning this Bulletin.

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