Landlords sue Kansas City over water billing methods

Northeast News
April 22, 2013

A group of landlords is suing the city of Kansas City to dispute the city’s water billing methods.

“We feel it’s a violation of our constitutional rights,” said Fred McGary, a landlord listed in the lawsuit and operating manager of the LL Legal Defense Fund which is funding the suit. “We feel these practices are illegal.”

Recently the group met to raise additional funds for legal defense and discuss the details of the lawsuit.

“It’s putting a lot of us out of business quite frankly. It’s just a matter of time,” one landlord said of the city’s practices.

Seven plaintiffs are listed in the lawsuit, which was filed March 19 with the 16th Circuit Court of Jackson County. One of the main components hinges on City Ordinance 120551, Section 78-6, which permits the city to bill the owner of a commercial building with a service connection “for all water purchased.”

According to the lawsuit (1316-CV07178 Joseph Cangelosi et al v. City of Kansas City, Mo.), “Though neither the City Code nor the Ordinance permit the City to bill the owner of a commercial building for sewer charges and sewer services when there is no meter and the building does not consume water, the City bills include a general service charge for the cost of meter reading, meter maintenance, billing, collecting, and accounting services, even if a water meter does not exist and has not been maintained and/or water has not been used and is not being used.”

In addition, the ordinance allows the city to hold a property owner liable for water and sewer services consumed by a tenant, lessee or occupant and terminate service or issue a lien against the property due to delinquent charges without giving adequate notice to the property owner or the opportunity to be heard, the lawsuit states. The lawsuit argues that the tenant, not the landlord, should be held accountable for water and sewer services used. According to the lawsuit, a number of accounts that were previously registered under the tenant’s name were transferred into the landlord’s name without the landlord’s knowledge or consent. The city then billed the landlords for the tenant’s water/sewer usage and any delinquent charges.

“As long as they’re allowed to transfer water in our name, we’re going to be gouged,” a landlord said.

For landlord Michael Byrd, who owns property in the 5600 block of Wayne Ave., the tenant’s delinquent account totaled nearly $3,000 and Byrd received the bill. When the tenant signed the lease, the tenant agreed to pay utilities, gas, electricity and water. Byrd never consented to being a joint account holder for water/sewer services and never stated he’d guarantee payment of the tenant’s account. However, according to the lawsuit, the city at some point prior to Jan. 12, 2012, removed the tenant as the account holder and put the account in Byrd’s name without Byrd’s permission. On Jan. 12, 2012, the city mailed a letter to Byrd demanding payment for unpaid water and sewer services consumed by the tenant, along with late fees and penalties.

“Byrd was wholly unaware of any billing discrepancies until a back-due bill was mailed to him in the amount of nearly $3,000,” the lawsuit stated.

Byrd never received any copies of the tenant’s monthly water bill. Worried about facing penal action and incurring a negative credit history, Byrd reluctantly paid the bill, the suit stated.

McGary also incurred damages. McGary, who operates under the name Lexington Land Trust (LLT), owns property in the 3400 block of Lexington Ave. On or about July 27, 2011, the city removed the tenant’s name from the water/sewer services account and put the account under McGary’s name without his consent. About a year later, McGary received a turn off notice from the city stating that unless the delinquent account totaling $590.63 was paid, water and sewer service would be turned off. McGary was unaware of the tenant’s unpaid bills until he received the back-bill in July of 2012. McGary evicted the tenant and a new tenant signed a lease on April 28, 2012, agreeing to pay for water and sewer services. However, about two days later, the city refused to open an account under the new tenant’s name, stating that LLT would first need to satisfy the account of the previous tenant.

Although the city refused to open an account for the new tenant, it left the water turned on and continued to bill LLT for the previous tenant’s bill as well as the new tenant’s monthly water/sewer usage. McGary refused to pay. As a result, the city verbally informed the tenant it would shut off the water unless LLT paid the bill, and on Aug. 7, 2012, the city finally shut off water service.

One plaintiff, NATCO, was billed for delinquent water and sewer service charges incurred from Oct. 7, 2010 to April 4, 2011, for a property in the 100 block of Lawndale Ave., even though the company sold that property in January of 2005.

Other sections of the lawsuit cite how the city failed to turn off/on water in a timely manner at the owner’s request, how switching from a bi-monthly to monthly water billing system created a 100 percent cost increase, that the plaintiffs were deprived of property rights and interests without due process of law by charging them to replace or repair a vandalized or stolen water meter, among other allegations.

The lawsuit alleges the city applied its ordinance unconstitutionally; deprived plaintiffs of procedural due process; caused inverse condemnation by refusing to open new accounts or turn on water for tenants unless the landlord satisfied the previous tenant’s delinquent account; and created an unlawful or unconstitutional imposition of service charges to non-metered properties.

A court date has been scheduled for 10 a.m. July 29, 2013.

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