The owner is responsible for title five. A purchaser should be very cautious and insist upon an approved board of health plan and installed prior to taking title unless there is a back out clause.. because, if the condirtions in the soils turn up differeant then the plan (and this does happen) you could end up losing value in the property. ex plan calls for 4 bedrooms , soils will only allow 2 bedrooms or worse a tight tank!
Nick

Thu Apr 17 2008, 05:26

Ryan,

As Rob said, the bank will require a holdback at closing for 1 1/2 times or so the cost of the system repair. Unfortunately, if the reason the seller is not repairing the system is due to lack of money, there probably isn't enough money to escrow 1 1/2 times the cost of the system. If they do have some equity but no cash available for the repair, they might agree to accept more for the purchase price and have the repair completed just prior to closing. Some septic installers will take payment at the closing.

So the big question is whether the property can be purchased at or slightly below market value, LESS the cost of the system repair. That is where it should be priced. Talk to your mortgage person...you may be able to get a rehab loan. Ask for the Title V report so you know why the system failed. If the tank is okay it will save some money. Has the seller had a plan designed? Even if they haven't, call some of the local septic installers such as Biagini and ask if they can give you a ball park of what a repair will cost for the number of bedrooms (plus any future expansion?) at the property. Pick someone who does a lot of work in Marshfield so they are familiar with the various soil conditions around town.

If there is no plan, call an engineering firm to determine what it will cost to have them design a plan and get it permitted. Grady Engineering in Kingston is very proactive and will use newer "alternative" system designs that can save money.

If there is a silver lining to all this, you should be purchasing the property for well below market value, and you should expect to save additional money off the purchase price because of purchasing a property in this condition. Often times buyers purchase property with the system to be installed by the seller and are very disappointed. No matter how well they look at the plan and understand that the yard will look different, when they see the completed project it's not what they imagined.

If you decide to go forward be sure to shop around for septic installers! You'll probably find that prices vary considerably.

Chris

Mon Feb 25 2008, 04:24

Good afternoon Ryan:

The law does not indicate that the responsibility for Title V certification rests on the seller. Traditionally the seller has been responsible. Sellers will try and have the buyer be responsible if there is no profit or a loss in the transaction. Banks will not grant a mortgage without doing a hold back of monies to cover 1 1/2 to 2 1/2 times the projected cost of a new system.

Sun Feb 24 2008, 12:53