Sure it's legal if it is all disclosed, as well as any code violations, notice of abatments, red flags, etc. reports, and inspections.
The hurdle in selling is more a question of completing the trasfer.
Lenders will not be inclined to lend, unless it is a FHA rehab loan that includes the repair or replacement, which, might render it financially unfeasable.
Plus fines and fees would be another issue.
Simple answer, a willing and informed buyer may purchase a home with a non working septic, from a seller who has fully disclosed and documented every material fact regarding the property.

Is it legal? That's a strong term. I've not had a client be arrested yet for selling a broken septic system. But the general rule is that the seller is responsible for a septic inspection and the lender will most likely request a certification that it is in good, working condition.

Now, if it is not in a certifiable working condition then it can become complicated. And no, I will not represent an owner that would disguise this fact intentionally to avoid the cost to remedy the system. When it is agreed to by all parties including the lender that they are willing to allow escrow to transfer title my waiving this condition and it is well documented to ensure constructive notice prior to the close of escrow, then yes, a home can be sold without a working septic system.

Under this circumstance, who bears the responsibility to remedy the septic repairs once escrow closes? The buyer would shoulder that burden. But I've never witnessed this agreement between parties before and would not be an advocate for it.

The septic system certification is a well known document that all diligent real estate brokers advise their clients the necessity of when the listing is taken. I go over the best and worst case scenarios that could occur once the septic system is inspected and inform them of their potential liability associated with the whole process.

Now with all of the short sales and foreclosure properties on the market today this usual procedure and protocol may be very different. What seller is going to pay for any improvements to their home when facing a foreclosure? And why? They get nothing out of it. Properties are sold in "as is" condition when sold by a lending institution unless stated otherwise in the purchase contracts.

It will be up to the REO asset manager if they are willing to take on this responsibility even if it means that a new system must be installed or if the "buyer beware" approach is taken and they place all liability onto the buyer. So I will leave it at that for now. If you are purchasing a property with a septic system and it is bank owned, "Buyer Beware". If it is privately owned then "Seller be Aware".

I've dealt with many, many, septic certifications (lovely part of my job). I hope my answer helped you. Good luck!

Diane Wheatley, Broker
diane@moveupproperties.com

Hi Larry,

You would need to be an all cash buyer to attempt this transaction.
I am sure health codes may be an issue but only if you wave a red flag and alert them.

All the best,
James Joseph

Yes. You can sell a home in any condition. The only issue is if there is an abatement in place from the County of Sonoma you cannot transfer title until these fees are paid off. I'm representing a large lender who had to do just this with a whole host of permit violations on a property in Monte Rio. The fees totaled over $11,500! And now we need to deal with the whole septic issue, foundation and other construction defects which will cost thousands of dollars. Also, if the property has been abandoned for 2 years you will most likely need to replace the existing septic system with a class I system. This is a standard, system with leach lines per bedroom. The property I referenced is only 8,000sqft on a severe slope---ain't gonna happen!! You would then have a picnic spot as the home would have to be abandoned or wait until sewer comes along. In this case slim to none and slim just left town!!
If you are the homeowner selling this property with a failed septic system then you are REQUIRED to disclose this material fact. If you have discovered this failed septic system AFTER you purchased the property and it is on record with the local city or county agency as being failed and the owner was notified then you have a case against that Seller. If they had no clue and you failed to do your due diligence and get the system checked then you might be out of luck. If your Realtor/Agent representing you in the sale did not advise you to perform a septic system inspection then you might have recourse against them.