Title 5: The Septic Clock Before You Sell

In the towns around Boston where houses sit on septic, the inspection is what turns a smooth fall closing into a scramble. Most of the time the system is fine and the report on the seller’s shelf is just a year too old, and nobody looks at the date until the buyer’s lender asks.

The two-year rule

Under 310 CMR 15.301(1), a system shall be inspected at or within two years prior to the time of transfer of title to the facility served by the system. Count the two years back from the closing date.

The extension, and what it costs to use

The same subsection allows an inspection conducted up to three years before the transfer, if the inspection report is accompanied by system pumping records demonstrating that the system has been pumped at least once a year during that time. In practice that means an invoice from the pumping company for each year. If you own a house on septic and you think you might sell in the next couple of years, keeping those invoices in one folder is close to free and occasionally saves a closing.

What isn’t a transfer

The regulation lists five transactions that don’t trigger the requirement. Taking a security interest in the property, including issuance of a mortgage. Refinancing a mortgage, whether or not the lender stays the same. A change in the form of ownership among the same owners, such as placing the house in a family trust of which the owners are the beneficiaries. Adding or deleting a spouse as an owner or beneficiary, a transfer between spouses during life, or the death of a spouse. And the appointment of or a change in a guardian, conservator, or trustee. So if you’re refinancing, or placing the house in a family trust where you remain the beneficiary, the inspection isn’t part of it. Bringing a new party into the trust is treated differently under 310 CMR 15.301(3)(i), and does require the inspection.

The exemptions

310 CMR 15.301(4) lists four exclusions. A new system with a certificate of compliance issued by the approving authority within three years prior to the transfer, where pumping records show the system was pumped at least once during the third year. An enforceable agreement with the approving authority to upgrade the system, or to connect it to a sanitary sewer or shared system, within two years following the transfer, provided the agreement has been disclosed to and is binding on the subsequent owner. A property subject to a comprehensive local inspection plan approved in writing by the Department, where the system was inspected at the most recent time the plan required. And a transfer of residential real property between current spouses, between parents and their children, between full siblings, or into a revocable or irrevocable trust where at least one designated beneficiary is of the first degree of relationship to the grantor. That last one is narrower than it sounds. 310 CMR 15.301(3)(e) covers interfamily transfers that aren’t excluded under (4)(d), and those still require the inspection, so confirm with the approving authority before you count on it.

When winter gets in the way

If weather conditions preclude inspection at the time of transfer, the inspection may be completed as soon as weather permits, but in no event later than six months after the transfer, provided that the seller notifies the buyer in writing of the requirements of 310 CMR 15.300 through 15.305. That written notice is part of the provision. The regulation doesn’t say who pays if the system then fails, which is the whole problem, because the buyer owns a house with an uninspected system for those months. If you’re buying under that provision, agree in writing who pays if it fails.

One more trigger people forget

310 CMR 15.301(5) requires an inspection prior to any change in the type of establishment, an increase in design flow, or any expansion of use of the facility served for which a building permit or occupancy permit from the local building inspector is required. That permit condition is the part that decides whether it applies to you. Finishing a basement into a bedroom, or converting a single family into two units, can put you there without any sale at all, because the system was designed and permitted for a specific flow.

What I tell sellers

Book the inspection before the listing photos. If the system passes, that’s one big contingency off the table. If it fails, you find out early enough to get it fixed before it’s a negotiation, and you still have the whole fall. Thinking about listing a house on septic in Greater Boston? Send me the address and the date of the last pumping, and I’ll tell you where you stand. Diana Kim, REALTOR®, eXp Realty.