In their capacity as water supply and drainage principals, municipalities have a far-reaching responsibility to provide general water services if there is a need from a health or environmental perspective and it concerns a contiguous built-up area. In turn, property owners have an obligation to pay water supply and drainage charges if the property is located within an operational area and certain other formal requirements are met in accordance with the Public Water Services Act. It is not unusual for questions to arise concerning when the payment obligation arises. The Land and Environment Court of Appeal has recently delivered a judgement clarifying that the requirement to pay a fee is not linked to actual connection and use of the water service.
The property owner's obligation to pay water supply and drainage charges for public water services is regulated in sections 24 – 26 of the Public Water Services Act (”LAV”). According to section 25 and section 12 of LAV, the obligation to pay water supply and drainage charges takes effect if the property:
(i) lies within the operational area for a public water supply and drainage system and
(ii) the need of the water service with respect to the protection of people's health or the environment cannot be better satisfied in another way,
(iii) connection point has been established and
(iv) the property owner has been notified concerning the connection point's location.
A question that sometimes arises is from when the water supply and drainage principal is entitled to charge for water supply and drainage. This question has been the object of previous judgements in case law, where it has been clarified that water supply and drainage charges may be debited as soon as the water supply and drainage principal has established a connection point and notified the property owner concerning its location, see for example Svea Court of Appeal's judgement in the cases M 4291-13 and M 2675-16. As it is a frequently occurring question, we would like to highlight the fact that on 5 December 2022 in case no. M 6897-22, the Land and Environment Court of Appeal examined this question once again.
EXAMINATION IN THE CASE
The question in the case concerned the requirement to pay for a property that had not been connected to the public water supply and drainage system, but that was located within an operational area for a public water supply and drainage system for water and waste water. The water supply and drainage principal stated that the property owner was obliged to pay a usage fee for public water services from the time when the property owner was notified that a connection point was established for the property. The municipality instigated proceedings and put forward demands consisting of unregulated usage fees attributable to the time prior to the notification concerning the connection point. According to the water supply and drainage principal, the usage fees were intended to cover the water supply and drainage principal's costs to keep the public water supply and drainage system available and functioning, so that connection could take place when the need arose. According to the municipality's water supply and drainage tariff, there was also a usage fee for properties that were not connected to the water supply and drainage system.
The property owner contested the obligation to pay usage fees and stated that no agreement concerning supply of public water services had been concluded between the parties in the case and neither had the municipality supplied any water services as the property was not connected to the connection point. The property owner had previously paid water supply and drainage charges for connection, but considered that the water supply and drainage principal had no legal support to charge usage fees when the property did not use the relevant water services.
The MÖD observes that the water supply and drainage principal's right to impose usage fees on a property owner for public water services is not dependent on the property owner de facto using the water supply and drainage system. A property owner is consequently obliged to pay water supply and drainage charges from being notified concerning the establishment of a connection point.
The question that was examined in the Land and Environment Court of Appeal does not entail any difference in how the legislation has previously been applied, nor the implications of the preparatory materials for LAV. However, the significance of the judgement for the water supply and drainage principals, the municipalities, should not be underestimated. The water supply and drainage principals have now obtained another judgement to refer to, which shows that the usage charge can also be levied if a property is not connected to the public water supply and drainage system. This which may prove to be useful in cases where a property owner opposes the payment liability.
If you would like further information about the legislation regarding public water services or if the article raised any questions. You are welcome to contact any of us or your normal contact person at Lindahl.