HARVARD — What’s a homeowner to do in the center of town when their septic system is on the fritz and they’re looking to sell?
The Massachusetts Department of Environmental Protection states on its website that, under Title 5 of the state Environmental Code, a septic system does not need to be in passing condition prior to a sale. But the reality is that many lenders will not allow a mortgage to close on a property until the failing system is upgraded or that sufficient funds are set aside to perform the upgrade post-closing.
The Harvard Board of Health is exploring the conundrum. Its members agreed with a local real-estate broker that it would be unfair to force sellers to spend tens of thousands of dollars to fix or install a new system when the construction of an anticipated town center Sewer district sits on the horizon.
At their Monday night meeting, the board explored the creation of a waiver form for those who find themselves in the stinky situation of a suspected failed system. Generally, state regulations require that a system must be inspected within two years prior to the transfer of a property in an arm’s-length transaction.
Working with language borrowed from Acton, the board considered the creation of a waiver application as permitted under the Code of Massachusetts Regulation (310 CMR 15.301(4)(b)). The state regulation allows a homeowner to forgo a Title 5 inspection when selling their property when a public or shared sanitary sewer solution looms on the horizon:
(If) the owner of the facility or the person acquiring title has signed an enforceable agreement with the Approving Authority to upgrade the system or to connect the facility to a sanitary sewer or a shared system within the next two years following the transfer of title, provided that such agreement has been disclosed to and is binding on the subsequent owner(s).
The waiver form, to be filed with the board by a homeowner, would include a signature block at the bottom of the page for board members to sign if and when approval is given to the waiver. The document could then be shared with buyers and their banks to try to provide some assurances that a permanent public sewerage fix is on its way.
“Buyers are anxious…Sellers are held hostage,” said Realtor Rhonda Sprague of Harvard Realty. “I think it’s incumbent on you to make a decision. You don’t really have a choice,” Sprague said.
She states she has two current listings that are in the town center sewer district. Otherwise Sprague says she’s heard from town center property owners, concerned about the possibly of two major sewerage-related bills.
“Why would someone put in a new septic system if the sewer is coming by their house … and get hit by a betterment?” Sprague asked rhetorically.
Sprague acknowledged that a bank’s fear is to foreclose on a property with a failed system, which generally diminishes the property’s value and its collateral for the mortgage. But she says she’s seen a lender accept a waiver in Shirley when a sewer system was imminent.
The state regulations allow a local Approving Authority to waive the inspection period for up to two years after the time of closing. The draft waiver language before the board contemplates a 180-day window to connect a property to the town center sewer system following the date of either the waiver request approval or the completion of the town center sewer system, whichever comes later.
The draft Harvard form must be disclosed to potential buyers of an affected property. The waiver period would be shortened if any septic failure endangered public health. But Sprague told the board that it’s been her experience that most septic-inspection failures are more technical in nature and not public health hazards.
Also, the waivers would become null and void if the municipal sewerage project fails to materialize. If cost overruns trigger a so-called ‘circuit breaker’ and pulls the plug on the project, the waiver agreement would require the seller to immediately comply with Title 5 measures with a septic fix.
“They put in a circuit- breaker for cost overruns so it’s still a crap shoot,” said Board of Health member Thomas Phillipou. “If the costs are higher, the more likely it is that the circuit breaker will be enacted and nothing is done.”
“There would be hesitation. But even with this document there’s still hesitation,” he said. “We’re granting you some sort of grace period to not do anything provided the environment it still protected. So really what we’re doing with this is that there’s a pretty decent chance we’ll be able to offer a better alternative and we’re willing to put the Title 5 on hold.”
“The only thing I’d say is you still need this,” answered Sprague Board Chairman John Spero said. “You can’t go wrong having this.”
The board was to ask town counsel to review the appropriateness of the waiver form.
Board of Health member Lorin Johnson abstained from participating in the discussion and left the meeting room at the Hildreth House on Monday night when the topic of discussion turned to the Title 5 waiver form. Johnson stated it was upon advice from the state to avoid any appearance of a conflict of interest under the Ethics Laws.
Johnson’s mother owns property at 4 Cross St. at the corner of Old Littleton Road, which is on the market to be sold through Harvard Realty. Johnson said he’d recuse himself on the waiver form issue, despite the fact that the Cross Street property has a current passing Title 5 septic inspection in hand.
