--- title: Commercial Loans and Fun Blog | water liens description: water liens | George Blackburne, owner, offers insight into the commercial loans and mortgage industry in this Commercial Real Estate Loan Tips blog. --- [![c-loans-logo-2025](https://info.c-loans.com/hs-fs/hubfs/images/c-loans-logo-2025.png?width=183&height=86&name=c-loans-logo-2025.png)](https://c-loans.com) [Terms of Use](https://www.c-loans.com/terms-of-use) | [Disclaimer](https://www.c-loans.com/disclaimer) | [Blog](https://info.c-loans.com/) # Commercial Loans and Fun Blog ## [How Water Liens Can Affect Commercial Loans](https://info.c-loans.com/bid/86133/how-water-liens-can-affect-commercial-loans) Posted by [George Blackburne](https://info.c-loans.com/author/george-blackburne) on Tue, Aug 6, 2013 - [Tweet](https://twitter.com/share) Our hard money commercial mortgage company, [Blackburne & Sons](http://www.blackburneandsons.com), is working on a $2 million loan this week; and we have run into an interesting situation.  Our borrowers originally purchased a foreclosed apartment building from a bank, subject to an unpaid water bill. [![Click me](https://no-cache.hubspot.com/cta/default/37671/71f8e27c-2820-42c5-ae3c-3329e127410a.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/71f8e27c-2820-42c5-ae3c-3329e127410a) As we proceeded further into the underwriting, we discovered that the unpaid water bill was a whopping $400,000 - plus it was a senior lien on the apartment building! [![Free List of 3,159 Commercial Lenders Sort By Your Own Criteria](https://no-cache.hubspot.com/cta/default/37671/edc33fe8-9d87-477b-bf2f-07a33d3d2d24.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/edc33fe8-9d87-477b-bf2f-07a33d3d2d24) Obviously this water bill will have to be paid in full before we close our new loan; otherwise, the water company could foreclose on the building and wipe out our mortgage.  But at least the unpaid water bill was a recorded lien.  The water company was playing fair. We once foreclosed on an apartment building near Kansas City, Missouri.  When we went to put the water bill in our name, we discovered to our horror that the water company was owed $70,000 by the prior owner.  Before the water company would turn the water back on, we, the innocent purchasers for value (foreclosure), had to pay the former owner's water bill!  The water company was a monopoly, and the city had passed a local ordinance authorizing the water company to withhold services until the buyer paid off the prior owner's bill.  Nothing was recorded on title.   I'm not sure that such an obviously corrupt scam would survive a legal challenge; but the reality is that the city could withhold water services for years while the case made its way through the courts. Is there a lesson to be learned here?  I dunno.  Perhaps its this, "There are all kinds of ways to lose money in commercial real estate."  Yikes. [![Click me](https://no-cache.hubspot.com/cta/default/37671/a509f69d-0bee-42d1-85c2-67d55b9dffeb.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/a509f69d-0bee-42d1-85c2-67d55b9dffeb) 3 Comments [Click here to read/write comments](https://info.c-loans.com/bid/86133/how-water-liens-can-affect-commercial-loans#comments-listing) Topics: [water liens](https://info.c-loans.com/topic/water-liens) [All posts](https://info.c-loans.com/all) ### George Blackburne III Owner of C-Loans, Inc. ![George Blackburne III C-Loans Owner](https://info.c-loans.com/hs-fs/hubfs/George%20Head%20Shot%20Small%205%20by%207%20copy.jpg?width=158&name=George%20Head%20Shot%20Small%205%20by%207%20copy.jpg) ### Subscribe via E-mail ### Connect with C-Loans ## [![Get the Latest Scoop on C-Loans Inc.](https://no-cache.hubspot.com/cta/default/37671/bacfb58b-143e-40d7-b126-33c182b5b90b.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/bacfb58b-143e-40d7-b126-33c182b5b90b) C-Loans.com® is sponsored by  C-Loans, Inc. — For more information, contact Tom Blackburne 555 University Ave., Suite 150, Sacramento, CA 95825 Telephone: (916) 338-3232 x 317 * Tom Blackburne in Indiana: (574) 210-6686 * Fax: (916) 338-2328 Real Estate Broker -- California Department of Real Estate -- License Number 01330173 Arizona Dept. of Financial Institutions – License Number 0909472 The Florida Mortgage Brokers License Number: 0708758 [Read our many client Success Stories](https://c-loans.com/mortgage-brokers-overview/success-stories/) » © 2025 C-Loans, Inc. All rights reserved.