The Boss (wife) and I are looking to purchase some land here in St. Ignace Michigan. We’ve negotiated a price, and had a lawyer write up a purchase agreement. One of the conditions stipulated in the purchase agreement is that “the seller must provide proof that an engineered septic system would be permissible”. The perk test that the sellers conducted 3 years ago failed perk, but the Health Department qualified that the site “may be made acceptable through the use of an alternative treatment system,” But that “Site acceptance cannot be granted without a specific alternative system proposal.”
So to prove that engineered septic system is permissible, we have to provide a specific system proposal.
Here’s the question: to design a system that could be approved, wouldn’t the engineers need OUR house plans to design a septic system? I understand that the purchase agreement is there to protect me, but this seems to be putting the cart in front of the horse.
Help! And thanks for the feedback!
Replies
Septic size is determined by the size of the house, IE number of bed & bath.
System design doesn't care bout your house plans, poop is poop.
The Health dept is going to have the final say, they may have already approved such systems for the area. Have you talked to them? Sounds like the place to start before spending money on engineering something from scratch.
Joe H
I'm with Joe. Deal with your health dept. yourself, it's safer.
As a seller, I'd tell you to take a hike. Did your attorney advise you to require "proof" from the seller? What's "proof"? A valid septic permit for 8 bedrooms?
Better for the buyer to determine site-worthiness for his project. When I buy land here, I arrange for septic approval. With our state health dept., that means applying for a building permit before they'll do a septic inspection.
All available for a "contract-purchaser". I don't pay for the building permit application, mention to the clerk that it might be awhile before I need approval. <wink, wink> They don't waste any time with it. Then, with the application number, head over to pay for the septic inspection.
A little convoluted with the health dept., but it works. There are numerous private companies who'll do the work here, but they aren't official, though I understand in some Va counties they are.
Again, it all goes back to the healt dept. requirements. Go to them with your plan. Leave the contingency, but satisfy it yourself.
PAHS works. Bury it.
"As a seller, I'd tell you to take a hike."Here, you would not sell much then.But I agree with you that it really is a buyer beware kind of thing and the buy should exert their own due diligence before proceeding in most cases. That is what a lawyer is for - to advise on local exigensies.I have acted as agent for buyer in researching in making sure certain things were useable or met the strictest interpretation of the land use ordinance. Finding a site in proximity to the shore with view that would be considered by the board to be buildable can sometimes mean taking a gamble though. Thus the envelope permits I mentioned above. It is a developement of the local board to help a seller assure a buyer, but still without liability to all concerned.
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I just sold an acre of land I owned. Before I put the sign up I had a septic design, and a septic permit from health dept. in hand. The (oss) onsite sewage sytem permit is good for 5 years. I then paid for a water meter certificate. Guarenteed water .
I also had a letter from the county concerning "eagle managment clause. Stating that I could build within said area.
I had a letter from county stating that there were no Acrheological areas around me. Indian problems .
As a seller I wanted all my ducks in a row. When it sold it was a cake walk to close the deal. CYA is my motto. Documentation is a must for a clean deal
Interesting - every area has its variables. You mention the water meter. Some areas out west would have a concern fro whether they could drill a well or not.My property is partly encumbered by the eagles nesting maps.
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You'll get your highest price if you do the deal like that. Bob's next test date: 12/10/07
I just sold an acre of land I owned. Before I put the sign up I had a septic design, and a septic permit from health dept. in hand.
There you go. I went one step better with the last land I sold. There was also a building permit, available for change. As I bought the land for pure speculation, I had the septic permit and building permit before I closed on my purchase.
My buyer was the beneficiary of my efforts. I was very well paid.
The immediate neighbor couldn't understand how I got the building permit, as he'd bought almost identical property but was turned down for a building permit. He made a mistake, said the wrong thing to a county bureaucrat. There's not much substitute for knowing the rules.PAHS works. Bury it.
Yall been attacking ways to do the deal which is fine . No problem with that or anything else .
Land that doesnt pass perk test is not worth much around here . Yes there is alternates but the problems dont usually end there. You still have a lot with a high water table or its accessible to flooding . The building then has to be altered for it and the landscaping . Considering the cost of the "alternate system" and the building modifications , its gets rather expensive unless the thing is water front high price .
It still remains a lot thats not highly useable for a lot of things like driving across it part of the year. Only certain things will grow on top of it and other things wont at all. Around here we call it crawdad land .
It better be fronting somthing that makes it worth it . In my experience its not normally. But I live where I live and Im not water front on a Mich lake .
Tim
Edited 7/5/2008 5:48 pm by Mooney
Finding a site in proximity to the shore with view that would be considered by the board to be buildable can sometimes mean taking a gamble though.
Perhaps I wasn't clear. Any gamble as to suitablility is a bad idea. That's why there are contract contingencies. As I mentioned, keep the contingency, but let the buyer satisfy it. If he can't the deal's off. The contract protects the buyer during the window he has to satisfy his requirements.
The reason it's better for the buyer to ascertain suitability is that only he knows what's suitable. Even under your scenario, some buyers could be left with unsuitable land, even with your "envelope permit".
Which presumably is exactly why your buyer employed you. I've often done similar.
It takes a great deal of effort here to understand the intricacies of various regulations. Unfortunately, county bureaucrats are instructed to only answer specifically asked questions. If you don't ask the correct question, you won't get your answer. They rarely will help out the hapless, even if they understand exactly what is desired.
It's an effort to push everybody into planned developments, "preserving" the rural land.
PAHS works. Bury it.
Great area. I have about an acre in Presque Isle by Rogers City that I cannot wait to build on.
Does your potential land have any frontage?
No, no frontage, but it's only about 1 1/2 miles from the Carp River. Lots of deer droppings on the back 10 though, so I suspect I better get my hunting license!!
No.
They wouldn't need to have your house plans but they would need to know how many bedrooms and baths etc. Essentially, the size of the field is determined by occupants and occupants are limited by the number of bedrooms.
The language by the health department does not prove that a system will be approved because they used the word "may".
You are in limbo with your contract and the easy way out is to opt out and get your money back. Or, spend the money and get the system engineered.
Bob's next test date: 12/10/07
"The language by the health department does not prove that a system will be approved because they used the word "may"."Oneadoze tings...varies by state.is his state the one you are familiar with?
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Yes, he's in MI but each county has their own ways of doing things. I'm not familiar with his county. I was just commenting on the words that he offered us."May" is one of those qualifying words. It may, or may not, be able to be engineered. Bob's next test date: 12/10/07
All,
thanks for the feedback. I guess I'll head out to the Health Dept on Monday to bother them. FYI, when the sellers came back with their counteroffer, they wanted the septic stipulation removed. Not being a builder (only a simple Country Pharmacist) I wasn't sure what "proof" was required.
-DC
I'd keep the stipulation if they already agreed on that one.The reason you have decided this is worth a certain sum of money is dependent on your goal of building a liveable residence of some sort. If it is not useable for that purpose, the value ( price) goes down.As a pharmacist, you would not sell a medication that does not contain the right prescription to perform is expected.A salve containing Vitamin A&D and Lidocaine might still have some value if the lidocane were removed, but the price would be lower and it would appeal to a reduced number of patrons.Same with pricing the land. It has value as a deer hunting location and as a residence, but remove the residential portion and the value goes down.
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You can (& I would) make the purchase contigent on receiving satisfactory engineering opinion of a suitable septic system. Have the ER completed as son as possible prior to closing. if land won't handle your planned project or the ER calls for something so extravagant ou can't afford it you can back out and not lose your earnest money.
"ER calls for something so extravagant ou can't afford it you can back out and not lose your earnest money. "I don't know about that. If the language of the offer didn't include some form or limit on the cost, the mere proof that an engineered system was possible would trigger the loss of the earnest. So, even if the engineer system might cost 100k, he'd still have to either buy the property or lose the earnest.
Bob's next test date: 12/10/07
I was under the impression it was still under the formal offer process so anything can still be added to the proposal/agreement. Septic system issues have been quite common in an area not too far from here with marginal to failed perc tests. Haven't had to add the addl part about costly systems (would have to be defined by a dollar amount) yet but would try if I thought it would be an issue.
Even if I did lose earnest money that would be chepaer than being stuck with property that would be too costly to build on.
"Even if I did lose earnest money that would be chepaer than being stuck with property that would be too costly to build on. "That's an excellent point. Bob's next test date: 12/10/07
Depends how you word the contingency. "Satisfactory" is in the eye of the holder of the report.Rebeccah
As stated above, residential land that isn't sitable for a septic system isn't worth much. Not sure who the the contractual burden of proof should lean on but, unfortinataltly, I know who the one person is who I can depend on the most.... You probably need to price out the proposed alternative septic system too. They can get so expensve that it severly devalues the worth of the land.
Typically, if a lot is worth 50k with a good perc, and it has a bad one and requires a 15k field, the lot is only worth 35k. Bob's next test date: 12/10/07
Right... but some alternative spetic systems can cost 40k and up...
Yes, so the fair market value of the lot would be reduced by 40k. Like Mooney said, if it's a lake lot, the 40k still isn't a deal breaker. It is on a 40k lot though. Bob's next test date: 12/10/07
you say a lot is reduced by the amount it costs to put in a tile bed
thank god i never followed your advice on any lots i have sold ( 32 over 20 years )
i have had people attempt to throw in all sorts of conditions whether it be their idea or some lawyers
a couple of months ago i sold a lot to a buyer on a hand shake and my lawyers office manager worked hard to kill it it seemed mainly because i took the deposit and the balance was due on receipt of the deed and they haddent controled it from start to finish ( lawyer BS)
when my lawyer got back from his mexican holiday i got the situation straightened up pdq as i was about to fire the lawyer which would of been nothing new
you can put in all the conditions you want but i may tell you to shove the conditions up you kester as i have to a few in the past !
"but i may tell you to shove the conditions up you kester"That's the idea. Each buyer figures the true value of a property using whatever means and methods they want. Each seller decides to accept or reject each offer. Bob's next test date: 12/10/07
yeah but wouldn't it be better to so "no thanks", "how about (fill in the blank)"?
shove it up you kester would probably be detrimental to the negotiation.
and isn't it "keister" anyway?
I was choosing to understand the message, not critique his choice of delivery. I'm fairly certain that he would be more diplomatic in a real negotiation and he just used that line as an emphatic gesture. I think we all pretty much agree...a property's values is established from many different factors and the cost or non-cost of disposing of the sewage is one to be considered when making the offer. Bob's next test date: 12/10/07
yeah i know, you are good at that. i keep hoping some of it will rub off on me.
contingencies or no, I think most of us agree that what kind of septic system is required effects the value of the lot in some manner. I think it pretty much comes under the heading of "buyer be ware".
One of the women who works for my company told me that her inlaws were giving them a piece of land to build a house on. Once she and her husband had the necessary feasibility study done for the septic system, they ended up deciding to just go buy a house elsewhere. ie - I don't know the estimated cost of the septic, but it was megabucks - I'm thinking it was in the $50k range, but can't really remember.
Now what about a site where it is not possible to build a field of any kind?
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Pretty worthless unless an adjacent property owner would want it, or park a camper on it weekends maybe.
Or get used to a porta pot.
Probably no building permit would be issued, so not worth much.
Same with no water.
Joe H
I'm not really sure what the options would be for a site where a field wasn't possible. I think I've heard of building a holding tank and getting it pumped on a regular basis. There are also active systems too. All of those options might not pass muster with the local health department. So, if the buyers are thinking about a property and want it for a residence, it probably would be worthless to them if they can't get a well and septic permit. We all value properties for different reasons. Bob's next test date: 12/10/07
My point is just what you say - that a buyer needs to be fully aware of local conditions.Just yesterday i was talking to a guy about a situation near here where somebody from CO bought property with a great view, then spent about 200K building a road before applying for a building permit.He was turned down and decided to walk away from it rather than spend another year and maybe fifty K additional to make it kosher.
All because he failed to do some studying and proceeded on his own assumptions at the start.
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"Now what about a site where it is not possible to build a field of any kind?"
You are describing the lot behind me. The 100 ft setback leaves a small envelop large enough for either a house or engineered septic, not both.
The owner has tried everything from approaching neighbours to buy rights to share their disposal fields, to submitting plans for a 10 ft wide house on posts with the field underneath.
The land is essentially worthless, except perhaps to her neighbours who could increase the size of their lots. Unfortunately, the owner paid top dollar for it and can't get her head around the reality of the situation.
I know of one similar to that too, but can't discuss details 'cause negotiations are in process.
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On your island how many building lots are there?
I just bought some land that is an area of mostly National Forest. Lots of land, but not much of it is available for sale.
Makes some fairly tiny parcels into valuable land that ordinarily wouldn't be worth much.
Joe H
Oh ten or twelve...LOLthat is a complicated long story. It is thirteen miles long and about three miles wide.We have a requirement that any newly created lot must be at least 1-1/2 acres and some other restrictions like no "Spaghetti lots" - there is a minimum number of feet on the road and on the shore.Most subdivision development has been on lots created by developers before things got tightened up in the eighties. That and families dividing their own land one parcel or two at a time. Anything five lots or more takes a couple years of studies and reviews and politicing....
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It does vary from state to state, but that very situation is common here in Maine.
A licensed engineer designs the system for a fee ( anywhere from $150 up) and the owner can then buy a permit to build it. As mentioned, the size of the house ( number of bedrooms here ) determines the size of the septic design.
Another common sales contract item here is what we locally call "Envelope permits"
Essentially the current owner obtains a permit stating that a house up to X number of bedrooms or square feet can be placed within a certain envelope footprint on the lot. The actual construction needs its own pernmit when the time comes.
This is important as a way to demonstrate the 'buildability' of a lot on an island where some lots are not useable for new residence because of various things like flood zones, steep slopes, lot size, setback requirements, soils, etc, etc, etc.....
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A good friend of mine just went through that here in NY.
Bought five acres with stamped approval- three years later he
gets around to building and got nailed. Failed the perk test.
no guarantees in life or real estate.
PS
He had to bring in ten dump loads of fill to make a raised leach
field. Poor guy.
Ten dump loads doesn't seem like such a big deal. Bob's next test date: 12/10/07
It does when your building out of pocket.
I am in a similar boat. Northern MI lakefront. Because the water table is high, I asked the seller to provide perk results and certified suitable building envelope on the property. He did, but it showed that a mound system is needed and it will not support traditional septic drain field anywhere in the property.
The value went down for me for 2 reasons: mound systems are costly to install and have higher ongoing costs, and mounds are unsightly and there is not a good way to shield them from my view.
Sale price needs to reflect these realities, seller may not see it that way.