An Express Article from the California Land Title Association
Bulletin 11/12-20 - August 23, 2011
CLTA is happy to announce that the East Bay Municipal Utilities District (EBMUD), in response to title and escrow industry comments and input, has substantially revised their procedures for the private sewer lateral (PSL) point-of-sale certification program. A “private sewer lateral” is the pipe that connects the home plumbing to the government-owned sewer main, usually located in the street, and which carries sewage from a building to the public sewer.
As CLTA members hopefully recall, CLTA originally contacted the EBMUD and opposed the PSL ordinance which we feared would create potential title and escrow obligations. Despite CLTA opposition, the EBMUD enacted the PSL ordinance and then subsequently issued guidelines that arguably created new escrow and title company requirements. The guidelines clearly assumed that escrow holders would have a role in verifying applicability of the ordinance, notifying affected parties to the transaction, and potentially holding funds post-closing to pay for the PSL work.
During the last three weeks, CLTA has been in communication with our allies at the CEA, helping to set up teleconference calls and meetings with the EBMUD. During these meetings, title and escrow experts from the two associations provided extensive information about general escrow procedures, possible pre- and post-closing issues, and offering suggestions for alternate solutions to the EBMUD.
Fortunately, this aggressive action by the CEA and CLTA paid off. Acknowledging that title and escrow issues had been raised that must be addressed, the EBMUD has substantially revised their procedures to accurately reflect that the duty of PSL compliance rests properly with the seller and the buyer in the transaction. In addition, the revisions of the guidelines eliminated the post-closing retention and administration of funds by the escrow holder.
Escrow holders should be aware that a seller and buyer may deposit to the escrow holder an executed Time Extension Certificate with instructions to remit funds to EBMUD at close of escrow.