The private water and wastewater levy investigation is managed by the private supply company set up by the developer. The private utility should be a separate single-use company, preferably organized as a limited liability company. For example, royalties should be earned annually by the building owner over a 23-year period and landowners should be entitled to a down payment. The proponent should demonstrate that private procurement costs are generally the amount required to compensate the developer for the costs associated with installing water and sanitation systems, including a factor of overhead and reasonable interest. One of the consequences of WSSC installing water and sewer systems is the introduction of royalties on the front feet on the land in development. These charges appear on the tax bill for the lots and are intended to cover part of the costs of installing water and sewers. The cost of front foot services is not levied by WSSC against soft development lots. The developer`s installation fee can be recovered by levying royalties on the lots as part of the development through a registered contract and by creating a private utility company whose purpose is to collect the fees. The proponent must ensure that the existence of private charges on water and wastewater and the collection of these royalties by the private distribution company are clearly disclosed to all lot buyers.

Most developers are familiar with the disclosure obligations imposed on homeowner associations under the Maryland Homeowners Association Act. It is advisable to provide all information on private charges on water and wastewater and on private public services which, if not, should be made available under the law with regard to an association of owners. This is generally achieved by making available to purchasers a disclosure statement containing details of private utilities and private charges on water and wastewater, and containing copies of private water and sewer canals. While private procurement costs in Montgomery and Prince George`s Counties remain a new concept, this has no impact on their applicability. The ability to impose private fees on lot owners through registered alliances is widespread and well accepted and is indeed one of the primary functions of virtually all Maryland-based homeowner associations. While it is theoretically possible to impose such fees, it is wise to structure them as closely as possible on royalties that would have been collected by the CSSC. The email address cannot be subscribed. Please, do it again.

This article was published and evaluated by FindLaw Attorney Writers Last updated March 26, 2008 This site is protected by reCAPTCHA and Google`s privacy policy and terms of use apply. Learn more about FindLaw`s newsletter, including our terms of use and privacy policies. In addition to a disclosure statement, specific advertising of private water and wastewater royalties should be included in each contract for the sale of land subject to these royalties.