I'm no authority, but as I understand it, Legionella bacteria can thrive and build up in water heating systems. Inhaled via fine droplets, or spread through ventilation systems, it can cause serious illness. The critical thing is that the water is always heated to a minimum temperature before it reaches taps and showers.

Legionella is nothing to trifle with. There was a stubborn outbreak in Montreal, Canada last year. Twelve people died.

Google will provide oodles of information, as will local health/safety code authorities. A couple of links for starters:

http://www.osha.gov/dts/osta/otm/legionnaires/hotwater.html

http://www.wras.co.uk/Preheated-Water.htm