Several Haywood County landlords are questioning the legality of a new policy adopted by the Junaluska Sanitary District that will require them to co-sign on their tenants’ water service agreement.
Michele Rogers, co-owner of Select Homes in Waynesville, was caught off guard when she received a letter in the mail Nov. 21 from Junaluska Sanitary District notifying her of the policy change.
The change, which applies to all new applications for water service, will require property managers and their tenants to sign a Utility Service Agreement that will allow JSD to go after the landlord if a tenant doesn’t pay their water bill.
“I certainly think it’s unfair to landlords that they are being required to co-sign for their tenants,” said Rogers, whose company manages rentals for owners. “I question the legality of the entire policy because number one, they’re forcing someone to enter into a contract — it’s coercion into a utility contract — and number two, they are potentially refusing service to a qualified person because they are saying without a co-signer they won’t turn water on.”
Ron Kroot, a private landlord with 10 rental units in the Junaluska district, said the new policy was just one in a long line of problems he’s had with the water district management.
“I’ve been amazed at their lackadaisical attitude since I moved here in 2002, but what can you do with a utility company that has a monopoly?” he said. “It’s just frustrating because there’s nothing we can do about it.”
Josh Nickol, general manager and finance officer for Junaluska Sanitary District, confirmed that property managers would be responsible for any unpaid balance on an account before the water could be turned back on for a new tenant.
“We are a public service provider but it costs money to provide water and sewer. The money lost affects the entire district because we have to pay for that water,” he said. “The policy is not in place to go after the property owner but to protect the district and its overall cost impact and all its customers.”
Nickol said the board of directors for the district had to implement this new policy because the water district was losing money and having to write off more unpaid bills each year.
“Over the past two years, we have had to write off over $16,000 all due to rental properties where tenants leave us with unpaid balances,” he said. “These are all monies over and above the deposit we collect — meaning the district has already collected the deposit amounts and what was left over is the unpaid balance.”
Rogers said the water district had a larger internal problem if it was losing that much money on unpaid bills. As a customer of the Junaluska district herself, Rogers knows it has one of the highest deposits in the county. To sign up for new water service, she paid a $200 deposit.
“My average bill is about $45 month — if they are losing money after collecting a $200 deposit, that is their fault,” she said. “People are not paying and they aren’t terminating their service when they should be.”
Someone’s $200 deposit should cover at least a couple months of unpaid bills. Rogers is concerned that tenants will take advantage of the new policy and skip out on their bills before moving out of the rental. Before taking a drastic measure like holding landlords liable for their water bills, Rogers said, she hopes the board will re-examine its internal policies.
Besides the legal concerns about denying services to an otherwise qualified tenant, landlords are saying the sanitary district board acted unethically in adopting the policy. Nickol said the policy was effective as of Oct. 31 when the board approved it, but the notification letters property managers received were dated Nov. 21.
Kroot said he never even received the letter, but got a copy of it from Rogers. Even if he had received it, he said he probably wouldn’t have thought anything of it because of the vague wording.
“The way the letter was worded you can tell they did their best to keep it under the radar — it didn’t say they we’re going to make us liable for the tenants,” Kroot said. “They should have reached out to us before they passed this policy.”
When asked if property managers or water customers had a chance to provide input on the policy before it was adopted, Nickols said the board discussed the policy for about six months during its monthly meetings, which are open to the public. Once it was passed, customers were notified on their November bills and the letter went out to property managers.
“They should have sent out a letter beforehand saying that they were losing money and the policy is going to be discussed,” Rogers said. “They should have invited people for input and talked to professional landlords who do this for a living.”
While the language in the letter didn’t sound like a big deal at first glance, Rogers said she had to dig through the district’s website to get a clearer picture. With more than 300 rental properties in the county — 71 of which are in the Junaluska district — Rogers is concerned about the policy’s affect on her business and her tenants.
“Potentially the only thing we can do is up our security deposit in case they don’t pay their water bill, but I’m hoping it doesn’t come to that,” she said.
Rep. Joe Sam Queen, D-Waynesville, manages about 150 rental units in Haywood County, many of which are in the Junaluska district, but he was unaware of the policy change when contacted for comment. He was in Raleigh for a special-called legislative session, but said he’d check to see if his office manager received the letter.
“I’ve never heard of anything like that,” he said about the policy. “That’s why you charge a security deposit — that doesn’t sound right.”
The next JSD board meeting will be held at 7 p.m. Thursday, Dec. 15 — Rogers, Kroout and several other private landlords plan to attend the meeting to discuss their concerns.
The district’s website contains news announcements about a sewer discharge into Richland Creek, a discolored water advisory from the town of Waynesville and a water conservation notice, but no mention of the policy change that will affect many landlords and tenants.
Rogers has contacted the state Attorney General’s office for a legal opinion on the policy, but hasn’t heard back yet.
Nickol said he is confident in the district’s legal ability to implement this kind of policy.
“These policies were reviewed and approved through our legal representative prior to being approved by our board,” he said.
As a property manager, Rogers said she deals with every water department and utility company in Haywood County, but Junaluska is the only one that requires a landlord to co-sign to receive service.
Nickol couldn’t say whether this type of policy is commonplace among other water districts, but did say sanitary districts are subject to a different set of statutes than a public water system managed by a municipality.
Voice your concerns
The Junaluska Sanitary District Board meets at 7 p.m. on the third Thursday of each month at its office located at 558 Old Clyde Road, Clyde. For more information, call 828.452.1178.