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Water Balance and Water Holdback Policy

Dec 17, 2025

(Effective as of September 22, 2025)

1. Water Balance Collection

  • During the closing process, FOLIO Title obtains the water balance from the lien search.
  • FOLIO staff will then call the water department to verify the actual balance by phone before closing.
  • At Closing, FOLIO will collect this balance from the Seller. This amount will be reflected on the Closing Statement as “Water Balance.”
  • If the balance amount provided by the water department is greater than the amount shown on the lien search, the greater amount is to be collected.

 

2. Water Escrow Holdback Collection

  • At Closing, FOLIO will also collect a “Water Escrow Holdback” amount, pending the final reconciliation by the water department.
  • The amount of the “Water Escrow Holdback” is calculated as follows:
    • When the confirmed water balance is less than $200, or if there is no balance, FOLIO will collect a $250 holdback.
    • When the confirmed water balance is above $200, FOLIO will collect the balance plus 25%.

 

3. Issuance of Check and Seller Authorization Letter

  • At Closing, FOLIO will prepare one check made payable to the water department, representing the sum of the water balance and escrow collected.
  • The Seller will sign an Authorization Letter addressed to the water department (template provided by FOLIO). This letter directs the water department to:
    1. Deposit the check issued by FOLIO at Closing.
    2. Refund any overage directly to the Seller at the forwarding address provided.
    3. Close the Seller’s water account once the final bill has been satisfied.

 

4. Buyer and Seller Responsibilities

  • Seller: By signing the Authorization Letter, the Seller acknowledges that any excess funds will be refunded directly to them and that the water account will be closed by the utility once the check clears. Seller is no longer required to send a Final Water Bill to FOLIO.
  • Buyer: The Buyer is assured that the Seller’s account will be closed and that no unpaid water balances will remain attached to the property.

 

Key Benefits of the New Policy

✅ For Sellers: Faster refunds (direct from utility), no need to send FOLIO a Final Water Bill.
 ✅ For Buyers: Confidence that the Seller’s water account is fully closed and settled.
 ✅ For Realtors: No post-closing delays or follow-ups needed.