Septic Bedroom Limitation

[smshee]

Have an accepted offer on a house in Massachusetts. 3BR, 3BA, 2100 sqft. Have now found out there is a title restriction for septic to a 2BR (although it is functioning as a 3BR). Also the 2100 sqft is inaccurate, it includes some non-livable space. The question is should it be appraised on the 2 or 3 Bedroom? My biggest concern is that as all appraisers are individuals, it could be appraised as a 3BR now (higher value), but when I go to sell later, that appraiser could count it as a 2BR. I talked to the BOH and they say no option to increase septic size. Is this just a risk or is there a standard appraiser approach? Thank you!!

 

[The Warrior Monk]

If there is a title restriction, that would lead me to believe that the number of bedrooms is restricted to two bedrooms. If that is in fact the case, the property being appraised cannot be misrepresented; i.e., it is a two-bedroom residence. Additionally, if marketed for sale, it would have to be represented as a two-bedroom residence; not as three bedrooms.

With these types of questions, though, sometimes there may be more involved; e.g., some type of legal, preexisting situation, or some other title issue that supercedes this. If this is a significant issue, it is best to have it reviewed by an attorney.

 

[Mark K]

I would make sure that the current appraiser has the info re; septic limitations. If he knowingly appraises it as 3 BR with the knowledge of the 2 BR limitation, and if this makes a value difference, he could be looking at trouble from various directions.

 

[Mr Rex]

Yes it is a 2 bedroom and as others said, the appraiser needs to be informed of that fact. Just because a room has a bed in it does not make it +1 bedrooms. I see lakefront properties with a 3 BR septic and there are beds in 10 rooms including several single over double bunk beds in the same room. The RE agents know they have to call it 3BR and they label the other rooms as "Undesignated". Several have faced lawsuits and lost for misrepresented the number of permitted bedrooms.

 

[glenn walker]

My bigger concern as the buyer rather than bedrooms is what kind of condition is the septic tank in ? A good functioning and maintained system on a house with 3 BATHROOMS will normally handle an-extra bedroom. When we purchase properties on septic we always get a septic tank certification to see what condition its in and to determine its exact location. Also ask the septic contractor if there is enough room or distance from the house to install a larger tank in the future in the event we want to replace it or get the 3rd bedroom permitted. Personally a 2,100 Sq.Ft. 2 bedroom house in my area is a hard sell so if that deed restriction is still valid and enforceable I would not want the property unless it was a substantially lower value or I stole it .The septic failures we have experienced were always on old tanks that were at or near the end of their remaining life. Sometimes the old concrete ones cave in.

As far as the value in bedroom difference I don't know your area but it's obviously a concern to you so my gut feeling is 3 bedrooms in your market area probably do carry a premium over 2 bedrooms. In my market nobody wants two bedroom houses except seniors because we have large immigrant populations who have large families. So who knows how the appraiser is going to appraise it that depends on a lot of things is the bedroom a real bedroom ? or just some area the owner turned into a bedroom like an-a side room or a Den etc ? What I don't understand is why a planning department and a title restriction in a deed would allow 3-Bathrooms but then be worried about bedrooms because bathrooms and laundry are what overwhelm septic systems.

1-As buyer if you are trying to get a lower value ? Then 2 Versus 3 may help you but will not prevent a future buyer or appraiser from considering it as 3 bedrooms so think about future sale and marketability will this issue be a hornets nest 5 or 10 years from now ? The true differences in what people will pay or value comes from market participants.
Example: If 10 people look at your property do they see it as a 2 bedroom or a 3 bedroom home ? also if the 3rd bedroom is unpermitted how much would it cost for a new owner to get it permitted ? And finally that deed restriction could be from 70 years ago and today may not even be relevant or even be enforceable and a good Real Estate attorney may be able to help you amend the title at a later date if ? your City or County now allows you to have 3 bedrooms under your zoning. I have amended probability five or six over the years and its always funny to see some of the old deed restictions that were made between 1890 to 1945-No more than three horses in front yard- no chinese buyers- no alchohol -no more than 1 bedroom and one outhouse -blah, blah, blah.

3- Concentrate on the currents septic tanks condition ? get a septic certification and sketch of where the tank is located and see if there is enough room to later install a larger tank- last one I did was about $7,000-$8,000 I dont know what they are now. Also laundry is often an-additional water run that places the largest load on septic systems and on some houses we install a separate a 100-300 gallon septic mini tank where all laundry water goes into that and not the main septic tank.

4- Go visit City-County planning department and speak with planner or tech to see if you are allowed to install a larger tank in the future.

5-As far as the appraiser if you give him/her a copy of the title he may or may not care and if an-issue comes up down the road and he will just say I had no idea may even claim he never saw the title restriction so its a he said she said type of dispute. And if a buyer knows at the time of purchase the home is a legally permitted for only two bedrooms then that is the starting point to when the issue was discovered and so the buyer knew there was an-issue and has no claim of future liability against anyone.

Good Luck: And don't overpay in a Covid-19 market because we have no idea how long its going to rebuild this economy and we have no idea what effect its going to have on real estate prices going forward but we do all know its probably not a positive- So negotiate like a investor and if its really a 2 bedroom tell the seller thats all you will pay for and if he/she is hard-nosed walk away-wait a few months and go see what is happening in the real estate market.

 

[Mr Rex]

Per the OP: I talked to the BOH and they say no option to increase septic size.

 

[Terrel L. Shields]

The question is should it be appraised on the 2 or 3 Bedroom?

We had a Realtor sued for selling a house as a 3 bedroom home when the septic was designed for only 1 bedroom. He ended up buying the house back plus paying the attorney fees and court costs. A limitation is set for a reason. And that reason is the system will generally fail. That's what happened to the Realtor. The buyers went to the office of the development and found their lot only would perk for a single bedroom. If you looked at the original blueprints I bet this one called the third room something else. It is a functional obsolescence. Treat it as such. Compare it to houses that are 2 bed. Forget pretending it is 3 bed. Call it an office or sitting room /sewing room, whatevfer, and justify why you call it 2 bedroom and disclaim the septic issue if it is used as a 3 bedroom....make sure everyone knows it is a two bedroom septic system and that proper maintenance of the system is assumed upon your part.

 

[Mr Rex]

Around here, new septic systems have to have 100% repair field. In other words, typically for a 3 BR house requires 3-100 foot drain lines and room for 3-100 foot lines should the first set fail in the future.

 

[Elliott]

I live in a septic tank area. The DEQ limits bedroom count to lot size. Make sense. Then came vacation rentals. Small lots then had houses with 4-bedroom houses. During hearings a Sanitarian said that systems were not designed to have weekend renters. The City could care less, they only see $$$. I see Septic Tank Truks almost every day. So here's my old dog response to issues like zoning, septic tanks and sticking to the rules, "They don't mean very much when the City sees houses as a revenue source for room taxes."

 

[smshee]

Thank you all - this is super helpful!!