We're closing on the sale of our bakery in about three weeks. The buyer wants to keep the lights on and the ovens running through the transition. What's the actual process for transferring the electric, water, and internet accounts so there's no gap in service? I've heard horror stories about utility companies forcing new deposits or requiring a shutoff and reconnection. Do I need to coordinate this through the closing attorney, or can I just call each company? Any gotchas with commercial accounts specifically?
Utilities
Transferring electric, water, and internet accounts without shutting off service
For electric, the utility usually has a specific 'transfer of service' form for commercial accounts. Call them and tell them the date of sale. They'll often just switch the account into the buyer's name as of that date—no shutoff needed. But be prepared: the buyer may have to pony up a new deposit if their credit isn't established with that utility.
Water is usually the easiest. In my experience, the city just reads the meter on the closing date and bills the seller up to that point, then starts a new account for the buyer. No interruption.
Internet is the one that'll bite you. If the buyer wants to keep the same provider and plan, you might be able to do a 'change of responsibility' rather than a cancel-and-reorder. But if they want a different Speed or provider, you're looking at a new install appointment, which could mean downtime. Check the contract for early termination fees too.
Good to know about the internet. We're on a 2-year contract with about 8 months left. Would transferring to the buyer avoid the ETF?
Depends on the ISP. Some allow assignment of the contract to a buyer, some don't. Read the fine print or just call and ask. And get it in writing.
We sold our coffee shop last year. The electric company required the buyer to fill out a new commercial credit application. Took a week. We gave them a heads-up a month before closing, so it was fine. Just don't wait until the last minute.
Also, make sure the closing attorbey or title company gets the final meter readings. Sometimes utilities will bill the seller for a few days after closing if the transfer isn't processed on the exact date.
And keep copies of everything. We had a situation where the water department claimed they never got the transfer form and billed us for the buyer's usage for two months. Took forever to sort out.
Honestly, the easiest path is to have the buyer set up their own accounts effective the day after closing, and you cancel yours effective closing day. As long as they don't actually shut off the physical service, there's no interruption. But some utilities won't let you cancel without a shutoff order. That's the catch.
So it sounds like I should call each utility, ask about their specific transfer process, and coordinate dates with the buyer. Thanks, all. I'll report back if anything explodes.
One more thing: if the buyer is a new entity (like an LLC), the utility might treat it as a brand-new account and require a deposit even if they're keeping the same service. Just warn them so they're not surprisd.
And don't foret to transfer the trash and recycling too, if those are separate. We almost missed that one.