I and my two neighbors entered into an agreement back in June of last year with the New York City Waterboard to pay arrears on a large waterbill. We have to pay $630 monthly, which amongst ourselves we agreed would be paid in equal installments of $210 each. The terms were such that as long as the payments were made timely over a period of 5 years, no additional penalty charges would be applied. Due to financial difficulties, I was late on a couple of my payments. As a result, the City revoked the agreement and are now charging a monthly penalty of .75%. Since the total bill exceeds $25,000, this amounts to about $190 month at present. My question is am I entirely responsible for this additional charge, or do my neighbors share in the liability. Note that they have not pursued this question with me, nor asked me to pay any additional liability. I am asking it entirely on my own. Since the payments are current at present, there are no additional ramifications such as defaulting to a tax lien, so long as we keep it current. That seems to be their greatest concern. I was unaware that paying a week or two late would result in such revocation. Note also that the additional charge would create significant financial hardship.
Was there a contract between the parties and the NYC Waterboard which included the revocation information?
Is the revocation open to dispute? You may wish to verify whether you are legally bound to accept their revocation of the agreement or may you challenge that assertion. If it was a unilateral decision by the Waterboard, you may wish to take it up with them.You are advised to consult with a NYC lawyer familiar with such agreements and then approach the Waterboard office to negotiate new terms.
If you are sure that they have the right to revoke the agreement and you violated the agreement, since you have caused the penalties to the other two neighbors, you may have to absorb all the penalty charges yourself. In principle, if by not paying on time you cause damage to others, there is no obligation to pay the damages, since the damage you caused was not done directly by you but was indirect. As such it is classified as Geromo, and is not actionable in Beis Din. However, there is an obligation latzeis yedei shamayim to pay for the damage, if the damage was caused either deliberately or through negligence. To assertain whether in your case your unawareness of this penalty can be considered negligent or not will depend on the local awareness in such situations, and a competent posek should be consulted. Furthermore, the mutual agreement between you and your neighbor may be grounds for obliging you with any penalties. It is impossible to give an absolute answer to this without hearing the details from both sides, and so as stated earlier, a competent posek should be consulted.