St. Johnsville homeowners, village board consult with lawyers about water rent dispute

At recent meetings of the St. Johnsville Village Board of Trustees, sisters Lee Johnson and Diane Robbins have been in attendance in order to resolve a dispute regarding delinquent water rents left on a house that they bought after it was foreclosed on.

The property, at 8 Kingsbury Ave., was purchased in late spring, and, with the suggestion of their lawyer, Gerard Snyder, they requested a tax search from the village prior to closing to ensure that all bills were paid on the home.

After requesting the information from the village clerk's office for a sum of $10, the search brought back nothing.

It was after the house closing that Johnson and Robbins received a delinquent water bill in excess of $500.

After much discussion at meetings in July through October, it was seemingly decided that an error in the search had caused the inconvenience.

Now the village and the property owners are in a back and forth discussion of what to do to resolve the issue.

Since the situation occurred, taxes were due, which the women paid on the house, including the delinquent water bill.

They have suggested being reimbursed the money, since they paid for a thorough search.

Village Attorney Norman Mastromoro said, "The village is not denying that there was an omission on the tax certificate regarding more than $500 of delinquent water rents, but the village is denying that that omission puts any legal liability on [the village] for any reimbursement or credit to the purchasers of the particular property. Essentially, for ease of discussion, I had broken it down into six reasons why the village takes that position."

The first reason Mastromoro cited was that the search was not a document that was mandated or required by law, and in this instance it was not certified as accurate to any particular party. Secondly, he continued, the village clerk and treasurer certified that she was the custodian of the tax water and sewer record, and that she and her office did not find any delinquencies at the time of the search.

"Our position is that this wasn't an accurate statement because the delinquencies were in transit to Montgomery County," Mastromoro said. "After a certain date of non-payment at one point in time, the village sends them to the county, which reimburses the village, and then the processing takes place through the county tax bill."

The village attorney also said that the village was not sure exactly what the search needed to entail when requested.

"They were not on any particular notice for what the purchaser would use the tax search for," he said. "The request was made by a telephone call from the law office to the clerk requesting a search, and that was completed."

A fourth reason was that, according to Mastromoro, despite the search, the seller of the property should have provided a history of any delinquencies to the buyer, and the buyer should have proceeded against the seller for violation of any warrantee that is in the deed they got.

"Along that line," Mastromoro said, "I received an oral opinion from the conference of mayors, an entity the village uses for quick resources and tools, and they said that when you are dealing with a bank that foreclosed on a property, extra care should be taken to get the facts and figures accurate. The seller would have known that there was a lien against the property."

Furthermore, he continued, a water rent lien follows the real property that has been served by the water, not the person, and a village cannot forgive, under law, a water rent lien without violating a constitutional prohibition against making a gift of public funds.

"There is no moral or legal obligation for the village to reimburse because the village has not ultimately benefited unfairly," Mastromoro said, explaining his sixth and final stance on the village's position. "It only collected what it was required to collect under law. The village is not in a better position because of collecting this delinquent rent."

Really, the village attorney said, the story only comes out in little bits and pieces at village meetings. There is an attorney on the other side of the case, and the two have been back and forth in trying to get the problem resolved.

"We're going to submit the issue to the State Comptroller's Office and consider it a binding opinion," Mastromoro said. "It's a cheaper and simpler route to take and we haven't been able to agree on certain wording."

Even if the state comptroller said the village should reimburse the purchasers, Mastromoro continued, he could not say that the village could not have the lien follow the property. "It was the end of May into June when this took place, it was in July when communications started back and forth between attorneys," he said.

Snyder is the lawyer that Robbins and Johnson sought for an opinion and legal action.

"The water rent wasn't reported on the tax search. We didn't find out until after the closing that there was an unpaid lien on the property. We're still trying to agree on the language and factual statements as well as to state our positions," Snyder said about the letter which will eventually be sent to the State Comptroller's Office. "We relied on the tax search. It said there were no unpaid taxes. We feel as if the village is required to pay or forgive that because of the error made at the clerk's office. It's a common thing for people to make mistakes, and I appreciate that. But my clients relied on that search. When you purchase a real property you normally get a tax search. It's an important document to receive for things such as water rents that might be outstanding. I don't agree the village wasn't aware of what the tax search entailed. The village should know that's the purpose and primary reason why you would order a tax search."

Snyder said that his clients paid the rents knowing they would file a claim against the village to reimburse them.

Now, they are alleging a breech of contract.

"What complicates this is that normally, the bank would take care of these matters during a normal closing, but during a tax sale like this one, the bank requires the buyers to do essentially all of the work," Snyder said.

The deal was through Fidelity National Bank, and assigned to Key Bank.

Snyder said he received a proposed positions statement that, once language was agreed on, would be sent to the comptroller's office.