Cost to Connect to Sewer

[Tom4value]

Why would you be concerned with the cost to connect to sewer? That is the Lender's responsibility and not yours.

It is your job to determine if it is feasible to connect to sewer. If it is, you condition for it. You determine feasibility by determining cost to do so. The guideline is if the cost is less than 3% of the value, it is feasible.

 

[RSW]

It is your job to determine if it is feasible to connect to sewer. If it is, you condition for it. You determine feasibility by determining cost to do so. The guideline is if the cost is less than 3% of the value, it is feasible.

No it's not. It never had been. Show me in the 4000.1 where it says so. Again, it's not there. It wasn't in the 4150.2 either.

 

[spittman]

**EDIT** misquoted FHA's guidance for public water, but comment on public sewage is the same.

Probably not our job to determine if it is feasible, but we still have to report if subject can be connected to public sewage. I'm sticking with my initial answer. OP first thing you do is find out if local authority services the Subject Property. You just call them up or email your questions. They will be able to respond right away if you give them the street name and block. If the property is not available for service in the area then end of story. Report that and your job is done. Here is the FHA requirement here:

 

[RSW]

**EDIT** misquoted FHA's guidance for public water, but comment on public sewage is the same.

Probably not our job to determine if it is feasible, but we still have to report if subject can be connected to public sewage. I'm sticking with my initial answer. OP first thing you do is find out if local authority services the Subject Property. You just call them up or email your questions. They will be able to respond right away if you give them the street name and block. If the property is not available for service in the area then end of story. Report that and your job is done. Here is the FHA requirement here:

View attachment 52465

That's exactly what Glen & I have been saying. Report if it is available and forget about it.

 

[Zoe]

It just depends on jurisdiction. If public sewer is available on the street and the subject is on septic, some jurisdictions require the property be hooked to the public sewer system before it can transfer ownership. You don't have to worry about costs to connect. You just make it subject to connection.

 

[Zoe]

If your doing cost approach, you could lump it into site development costs. We have some jurisdictions that require it be connected. I cannot remember what they said about the septic. Somebody with your jurisdiction in public works or code can tell you how it would have to be handled. I am not sure they can give you a cost estimate but they might could. If your doing it "as is", that would be needed but your not if it is required. Your doing it "subject to". It has to be done.

 

[Zoe]

I have had two situations similar and had to research both extensively. One was a huge commercial property (place of worship and proposed construction) that I am so glad I didn't check public. They had already started some work. Idk how. The city line stopped about 200 feet from property lines. That was major. If I would have missed that one, it would have been bad. The place of worship and city wound up splitting the costs to extend the sewer line. The other was single family residential and had public sewer available not on street in front but street behind and city said they had to connect. I don't know how they worked it out. Actually, I think I remember they had it both front and behind but it was going to be cheaper to go through somebody's yard behind and connect. I think they had utility easement they could go through and connect.

 

[Zoe]

The place of worship was in corporate limits. Just because a property is in corporate limits, don't mean it has all city amenities yet. I can remember it slowed construction on place of worship for a while Evidently when place of worship purchased site, they didn't know it didn't have public sewer on street in front of site. They were thankful to me for letting the bank know. I survived that bullet. They negotiated with City for a while to work it out. I am talking big place of worship. They worked it out. Septic system would not have worked at this place of worship. Then banker said they didn't know. He said they are very grateful you let us know. The place of worship had money. I am sure the City granted them a 50% discount. It was expensive though. It was not like tying to a sewer line from a house 50 ft off the street. We are talking big sewer line and I think they had to install a pump in also because of elevations. It was expensive. That was not in their building budget they presented to bank. That was not in plans and specs.


It cost a bunch to add it to plans and specs.

 

[Zoe]

You have to be particularly careful in areas that are on fringes of corporate limits and also older properties where corporate limits have surrounded them with new growth. Be careful.

 

[Zoe]

Should the hypothetical cost to connect to a public sewer include the disposition of the existing septic system? Would a "typical" jurisdiction require permits to remove a private septic system?

Hypothetical is "no go". You can't do that. It is either "as is" or "subject to". Your lender (client) will love you. You can do hypothetical but you need new SOW and new assignment. And get paid for first SOW and assignment. A small sewer line is not that expensive to connect usually from a urban or suburban home. Hey, if they cancel you out, get a fee from them.