I also am not an attorney and this should not be considered legal advice.
Your question reminded me of a hair raising personal experience I had about 4 years ago. I represented a listing where the seller needed to replace the failed drain field in order to sell the home. The seller contracted with a septic company who installed a new system. Neither the homeowner nor the septic installer performed a survey to determine the property line and the new drain field encroached on the neighbors property. Now, mind you, this septic inspection passed all the inspections and approvals of municipal and government agencies. No one noticed that this septic system was going to be a problem.
When the buyer's moved into the home, the neighbor knocked on the their door and told them that their septic system was on his property. You might imagine that this was a very stressful situation for all involved (Well, maybe not for the neighbor. I think he had visions of $$$).
The buyer engaged an attorney who contacted the septic company. The septic company ultimately paid the neighbor and recorded an easement on his deed.
There are many considerations in PA real estate law that come into play in your circumstances. How long has the septic system been there? What were the particulars concerning land boundaries at the time it was installed? What agreements were in place (if any) when it was installed?
There are many, many aspects of this situation that need to be ascertained before anyone could render an opinion on how to resolve the issue. This is probably not an issue that will be resolved in the Trulia Q&A forum.
One thing is certain, if your neighbor is encroaching on your property for any reason, that will effect your ability to make decisions concerning that property and, for your own benefit, you need to resolve the issue sooner rather than later.
Hope that helps. I wish you best of luck,
RE/Max Professional Realty, Inc.
Exton, PA 19341
Office: (610) 363-8444
Again, a disclaimer: This isn't legal advice.
First, there are some pro bono (free) legal services serving Bellefonte. See http://lawyers.justia.com/lawyers/pennsylvania/bellefonte
I figured that moving the field was impractical. Either that, or that your home had been built on part of the property that had originally belonged to the other property. But moving it was the first possibility to consider.
I agree with you: The bank is between a rock and a hard place. They're the ones that need a functioning leach field. Without that the house probably can't be sold to live in--it'd probably have to be sold just as land on which someone could NOT live.
So, what happens? I doubt you can force the bank to purchase that area of your land. The 100 year lease proposal is understandable, and might make sense in return for fixing the field, keeping the field in good repair, and for reasonable payment. But since that's not what's being offered, it doesn't make sense for you to accept that deal.
The major risks to you appear to be: (1) the actual physical risks from the leaking sewage; and (2) the possibility that your home might be subject to condemnation because of it.
You should look into Dan's suggestion regarding title insurance. I kind of doubt that's a solution since there's likely no problem with your title. Still, leave no stone unturned.
So, look into the pro bono legal services. And recognize that the bank's likely in a far worse situation than you are.
Hope that helps.
Whatever happens if that field has to be on your property you can charge as much as you want for it. I would not sign anything for nothing.
Up here we have pine tree legal. They are a state sponsored legal services for the low income/unable to afford a lawyer crowd. If you contact your local senator, congressman, probably even city hall person they could tell you about a similar program near you. Just a low income legal services that you can use. Maybe you should ask at the dept. of (state) human services. They might be able to offer low cost, maybe even free legal help.
Can you ask the bank to move or remove the drain field, or purchase the property from you? Sure. They might choose to purchase it, or to install one on the property it serves (if the land perks). But whether they choose to do that or not is strictly up to them.
You say that the field isn't working properly. Ask your lawyer whether it'd be permissible simply to stop the flow from the other house to your home. It'd be important to know whether your neighbor has an easement or any other sort of legal right to the field. (I do see you've said that the other house couldn't be sold "because he has no rights to the drain field." Don't take their word for it; have a lawyer look into whether any sort of legal rights exist.
The failed field leaking sewage on your property does raise all sorts of issues. Again, I'm not a lawyer, but it's possible your county or township might decide that YOUR house was uninhabitable since there is raw sewage spilling from a field on your property onto your land. Check with a lawyer.
At this point, my non-lawyer reaction would be to stop the seepage as soon as possible. Then let the bank figure out what it can do with a house with a non-functioning leach field.
But, to repeat myself, you really need a lawyer.
Hope that helps.
Does the neighbor have a easement for the leachfield? You need to know.
Does the neighbor have room to place a new leachfield on their property? You need to know. If not you have the bank or the next seller in a bind as they need your property.
Yup, talk to a legal eagle to get the answers you need.
p.s. you should have bought title insurance when you bought the house. Maybe it will cover this issue also.