Tax Liens for Unpaid DWP Bills Backed

With the backing of Mayor Tom Bradley and the Department of Water and Power, a Los Angeles City Council committee moved Wednesday to draft a new ordinance that would place a tax lien on the property of landlords who fail to pay their utility bills.

The proposal, aimed at landlords who refuse to pay their water or electricity bills in “master-metered” buildings, was hailed as a welcome alternative to the DWP’s practice of shutting off water to tenants to try to force landlords to pay delinquent bills.

“I not only go along with the (idea), I think it’s a damn good one,” said Councilwoman Joy Picus, who joined Energy and Natural Resources Committee Chairman Zev Yaroslavsky in endorsing the plan.

A public outcry over that shut-off policy--which the DWP recently suspended--sparked efforts to find another way to pressure landlords without penalizing tenants, some of whom went without water for days in the dispute over unpaid bills.

As an immediate solution, committee members and DWP representatives suggested the imposition of liens on landlord properties and said an ordinance could be ready for a council vote next week.

Presently, the DWP can place a lien on a property for a delinquent bill. But it is now considered a subordinate claim, and there is no guarantee that the amount would be paid. Department officials said that landlords, in effect, could run up large utility bills and simply let the property lapse into default and still leave the DWP with an uncollectable debt.

Under the suggested ordinance, the property lien would become a tax lien and--after county taxes or assessment fees were paid--the amount of money owed to the department would become a priority. If a utility bill is not paid in a set period of time, the property could be sold to pay off the debt.

Rick Caruso, president of the DWP board, said the lien idea would be only a part of the strategy to pursue unpaid utility bills and would avoid harming innocent tenants.

In a letter to Caruso, Bradley supported the lien proposal and also urged coupling it with provisions that would impose civil and criminal penalties “for the willful failure to pay major water and power bills.”

Although no public comments were heard Wednesday, landlord groups in the past have criticized the property lien concept while tenant organizations have voiced general support for it.

Barbara Zeidman, director of the city’s Rent Stabilization Division, told the committee Wednesday that a lien system would be fairly simple and easy to administer. But she added that the lien proposal only addresses DWP utilities and does not account for services provided by the Southern California Gas Co., private rubbish collectors or other critical services.

Zeidman urged the committee to explore the idea of establishing a city-administered escrow account for renters who face the prospects of having their water or electricity shut off. Under the escrow plan, tenants would voluntarily deposit their rent checks and the utility bills would be paid from that account.

Bradley has opposed the escrow plan.