My daughter called me and was very upset about a letter she received from WSSC – the local water utility company.  She told me the water company was charging her $17,000 for her new investment property.  I met with her and realized that this was the utility company’s standard letter describing a ‘front foot benefit’ charge. 

This is the charge that the water company made against my daughter’s property for bringing water to her new home.  But the fine print said she could write a check to WSSC for the entire $17,000 (not likely) or pay for this installation service over the next 23 years as part of the property tax bill. 

Most developers and property owners opt to pay over the 23 year period.  The reason to select this option is simple.  You may own the property less than 23 years and if you paid the fee all at once, you would be paying the charge for future owners you do not even know.  Since the average time an owner stays in their property is around 7 or 8 years, you can avoid 15 or 16 years worth of fees by just paying your share while you own the property.

Typically, if the utility company does not receive your check for the entire amount of the connection fee, they will assume that you have opted for the annual amount to be added to your tax bill.  If you are buying an older home, and you review the tax bill components, you will see this charge or there will be no amount in this category if the time has been sufficient to amortize the fee completely.  This is one benefit of buying an older home.

If you have a question about your front foot benefit charges, or other tax bill items, feel free to e-mail me.

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