A small, old septic system

[msking]

I am working on an appraisal for a tenant who wishes to make an offer to purchase the subject property from a family member. The property is in a "rural residential" zoning, 1 acre minimum lots that have wells and sewers. I am dealing with some of the complexities (like - where are the COMPS??), but have one specific problem/question:

The knowledgeable tenant and I had a conversation about the septic system's size ("small") and age (50 years). I instigated the conversation when I found that the home has a garbage disposal, a no-no for septics in my world. The tenants (2 adults, three small children) have been in the home for 8 years and mentioned that they have had the tank pumped once since they have been there.

This is a 3 bedroom, one bath house. New septic tanks in the area are required to be installed above ground due to the high water table. The tenant is aware that they would have to deal with the size/age of the tank before they could enlarge the house (1450 sq ft +/-, 3 bedroom, 1 bath). This might or might not require an above-ground tank.

No items of physical deterioration or functional obsolescence will be cured prior to the offer being made on the house - the appraisal will be "as is". Given that the septic is not of a size or condition (per the tenant/client) to "cure" the functional obsolescence of the floor plan, what statement would you make in the appraisal about the septic? I will include a statement about pumping and inspection by a qualified expert, but how should the general inadequacy be noted? Is it both physical depreciation (amount currently unknown) and functional obsolescence?

Thanks for your assistance!

 

[wyecoyote]

You could always make it subject to an inspection of the septic system.

 

[Pamela Crowley (Florida)]

I agree with Ryan.

As long as it's conventional, I would word it:

A septic system inspection is highly recommended due to it's age and size. This Appraisal and Report is based on the assumption that the subject property has a fully functional septic system.

Anything more is not really up to you plus, this makes it the underwriter's call, not yours.

 

[Caterina Platt]

The regulation of waste water systems are regulated by each individual state. You may make a suggestion to the tenant that if he chooses to add on to the home that he first check with the entity that issues septic permits to find out what would be required for any proposed additions. In my state, it is not the number of bathrooms that affect the minimum gallons of the tank requirement, but the number of bedrooms. The theory being that 4 people living in a 3 bedroom will likely bathe and wash the same regardless of the number of rooms to do it in. When you add a bedroom, potentially the dwelling could house more bodies to wash and clean up after.

The current system, if in good operating condition, would be 'grandfathered' in my state. Whatever was code at the time of initial installation is all that needs to be met. Check with your waste water regulating authority to be sure if that is the case in your state. If so, then suggesting an inspection is all you need to do. You are there to appraise what is there, not sell the property to the tenant for his future use. As a selling Realtor, you may have disclosure requirements if he/she voices his future intent. As the appraiser, you merely need to be concerned with what currently exists and the working condition.

 

[jtrotta]

msking;
Your initial statement; "zoning, 1 acre min.lots have wells & sewers"

Your second comment; states the age of the septic system is 50 yrs. old

Your third comment; New septic tanks in the area are required to be installed above ground, due to the high water table"

We will assume you've done all the necessary research to back up your comments; 1st-Q - if "sewers" are available as you noted they may be required to "tie in" *
Within your software program there should be statements that address the "water" & "Sewage" area; these comments address both and have pre-written recomendations.
You won't know if anything is "Inadequate" until you get a copy of the inspection report on those items you note, so how can you make an adjustment??? Are you an expert in the "Field of well water & sewage systems" :?:

Good Luck 8)

 

[Judy Whitehead (Florida)]

The situation regarding septic systems are pretty much the same where we are. Pumping it means it does need to be inspected. Probably what happened when they had it pumped, the septic guy told them about the size, age etc. of the system and they may have been ''babying'' it since then. I, too, would call for a septic inspection in this instance. Beyond that, it is up to the underwriter and the lending institution to determine if they want to loan money on the property in its present condition. You are not a septic tank expert and I would leave the determination to the experts. Treat it like any other instance where you would order an inspection, i.e. roof, plumbing, etc. and as said above, make the appraisal subject to the inspection and an ''adequate'' working system.

 

[Mountain Man]

I too have seen this problem before, except it was for new construction. The only solution to receiving a well and septic permit, was to obtain an easement from the adjoining land owner to place a new septic tank and drain field. But it was a 2 million dollar lake home, so what was another $50K for an easement?

Below is a statement I have used on a similar case with an existing home on an "inadequate" lot. I had some concerns, so I call the county authorities to get their take on it. Belive it or not, no one called to scream about the statement. They probably did not even read it since it was a big loan for a big customer.

The subject is on a 0.52 acre lot, the typical lot size is at least one acre. According to the White County Planing Commission, per phone conversation, any new construction must be on at least a one acre lot to be approved for a well and septic permit. However, since the subject property is not new construction, it is grand fathered in as an existing home. The subject can not be improved to increase the living area or increase the demand on the present septic system. Future approval for replacement, or major repairs, on the present system may not be approved by the governing commission since the subject site is less than one acre. Any other concerns should be directed towards a licensed inspector or plumber.

 

[Tim The Enchanter]

The subject is on a 0.52 acre lot, the typical lot size is at least one acre. According to the White County Planing Commission, per phone conversation, any new construction must be on at least a one acre lot to be approved for a well and septic permit. However, since the subject property is not new construction, it is grand fathered in as an existing home. The subject can not be improved to increase the living area or increase the demand on the present septic system. Future approval for replacement, or major repairs, on the present system may not be approved by the governing commission since the subject site is less than one acre. Any other concerns should be directed towards a licensed inspector or plumber.

I would have been expecting screams so loud you wouldn't need the phone! :lol:

 

[Mountain Man]

Sent it PDF, they probably did not print "that page" of the report for the UW. But I had a big disclosure on the first page that there was an addendum. Hey, if they later have a problem, I have an original in my files! 8)