by Marilyn E. Tomei
Associate Legal Counsel
A licensee must be aware of many issues when helping a buyer purchase an unimproved lot in an area where municipal or community sewer service is not available. The buyer's intended use of the lot may be restricted by governmental regulations and other factors - including whether the property can support an on-site sewage disposal system.
Sewage Systems
The law requires that every residence or place of public assembly have an approved system for sewage disposal. Approved systems include municipal systems, community systems and onsite systems. Some properties which are not connected to a municipal or community system will not be suitable for on-site systems, and the use of such properties will therefore be severely limited.
On-site sewage disposal systems vary greatly in form and price. Subsurface systems - from the standard tank and drainfield ("conventional" system) to the more complicated and expensive low-pressure pipe system - are regulated by county health departments. Systems which discharge above the ground, such as the spray-irrigation system, and systems which discharge into streams and waterways are regulated by the State's Department of Environment, Health and Natural Resources. Off-site systems and community systems which serve more than one lot are also regulated at the State level.
In determining which sewage disposal system is appropriate for a particular lot, the old-style "perc test" (which consisted of pouring water into a shallow hole and calculating the time it takes the ground to absorb it) has been replaced by a more scientific and exact procedure of site soil analysis. Based upon the proposed use of a property, as stated on a simple application, a Health Department Registered Sanitarian inspects the lot, takes soil samples and rates soils in several places on the lot as either "suitable," "provisionally suitable" (suitable upon fulfillment of stated conditions), or "unsuitable" for an underground sewage disposal system.
Improvements Permit
If a property has sufficient areas of suitable or provisionally suitable soils for an on-site system, and enough land for a "repair area" (which must remain vacant and undisturbed) should the system malfunction, the Health Department will issue an "improvements permit."
This permit authorizes an on-site underground system to be installed on the property - usually anytime up to five years after the permit is issued ' even if the rules for suitability change in that time.
if the sanitarian finds that the property is suitable for a conventional system, the permit will likely map the best location for the system and repair area., and possibly other improvements. When the property's water source is a well, the well's location and operation must be coordinated with that of the sewage disposal system. All components of the system must be at least 100 feet from any wells serving either the subject property or adjoining property.
The permit will also set a capacity limit for the system, giving a maximum number of bedrooms for a residential property, or the maximum number or rooms (or some other measure) for a nonresidential property. The property must be used in accordance with the design capacity of the septic system. The permit may also prohibit the use of an automatic dishwasher, garbage disposer or other use of the property which might overload the system.
Conditional Permit
if the property is not suitable for a conventional system, or the property has unusual topographical features (Such as a waterfront lot or a lot including a gully, stream or steep slope) the Health Department may issue the permit with conditions. A commonly imposed condition, when features of the property make the conventional system impractical, is that the system be designed by a professional engineer.
Such a condition obviously adds to the cost of the system. The Health Department will require that the engineer draw plans and submit them for feasibility review. In making this review, the Health Department will give great deference to the engineer's expertise, but will expect the engineer's plans to take into account the natural features of the lot and the proposed use of the property.
If the lot is not suitable for an underground system, the owner may petition the State for permission to install an even more complex system. The applicant should retain an engineer, and possibly an attorney, to assist in this time-consuming and expensive process which may not result in the issuance of the necessary permit.
System installation
Installation of the system on the lot may begin once the improvements permit has been issued and any conditions imposed on the permit have been met. At certain stages of construction, the sanitarian inspects the system. After it is properly installed, the sanitarian issues a "certificate of completion," which is usually the final act of the Health Department in this process.
Agents' Do's and Don'ts
Because of the uncertainty regarding the sewage disposal system, a buyer will probably want his obligation to buy the lot to be dependent upon his ability to install a sewage disposal system to serve his desired building. However, a licensee should refrain from attempting to draft contract contingencies on the issue of sewage system approval.
In complaints received by the Commission, the Legal Staff often sees contracts which include such licensee written clauses as, "Subject to perc test," or "Contingent upon septic permit." But what happens if the property is suitable for only a sophisticated, engineer designed system costing $12,000? Is the contingency fulfilled? What if the buyer anticipated spending only $1,000 to $2,000 on a septic system? Must the buyer buy the property? These questions have been raised by actual complaints received by the Commission. In addition to being vague and inadequate to protect the interests of the buyer and seller, the drafting of such terms constitutes the unauthorized practice of law.
An agent also should not attempt to advise the parties or give an opinion as to whether a lot might "perc," what type of septic system might work on the property, or what a system might cost. Leave these questions to an expert such as a sanitarian or engineer.
The agent's duty is to discover and disclose material facts. This duty includes obtaining as much information as possible from the seller concerning the sewage disposal system and its performance, and reporting this information to the buyers. Information can also be obtained from the Health Department. Health Departments keep public records of soil evaluations and improvement permits and certificates of completion issued. Similarly, local agricultural extension and soil conservation offices have topographical maps and soil surveys which may also be helpful.
Agents should always encourage sellers and buyers of unimproved lots to have the lots evaluated by the Health Department. The fee is generally nominal, and the information obtained can be invaluable to the parties. If the property is found to be unsuitable, the seller should adjust his expectations with regard to selling the property, or perhaps defer selling it until municipal or community service is available. Of course, any real estate agent involved must disclose the results of the evaluation to the parties. if the property is found to be suitable, the seller may want to request an improvements permit; the fact that one has been issued will likely make the property more attractive to a buyer.
When the parties are unwilling to have a soil evaluation performed prior to entering into a contract, or if an evaluation prior to making a contract is not practicable due to time or other constraints, the agent should refer the parties to their attorneys for the drafting of appropriate contingency language. in the long run, the parties will be better served if they go into a contract with all the facts rather than vague contingencies or oral agreements that are not included in the contract.