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Professional Standards Manual

Trading Services

4. General Information

(a) Contract Clauses - View Entire Section

(XXV) Health and Environmental Concerns - View Subsection
(3) Special Concerns with Rural Land

Specific rural problems that occur in significant numbers of Errors and Omissions claims include the inadequacy of sewage disposal fields and the quantity and quality of water supply.

See also information on harvesting timber and underground storage tanks.

(i) Sewage Disposal Systems

In BC, many homes outside major urban areas don’t have access to a public sewer system. This means wastewater must be treated on the property, in accordance with the provincial Sewerage System Regulation, using what is known as an “onsite wastewater treatment system.” 

RFC_4_septic1

For licensees representing sellers of properties with onsite wastewater treatment systems, there are a number of details they should be familiar with, in order to provide informed and competent service to their clients.

Licensees may wish to consider the following questions when listing a property with an onsite wastewater treatment system:

Does the Sewage System Regulation (SSR) apply to my client’s property?

The Sewerage System Regulation (SSR), which came into force on May 31, 2005, covers onsite wastewater systems that:

  • process a sewage flow of less than 22,700 litres per day;
  • serve single-family systems or duplexes;
  • serve different buildings on a single parcel of land; and
  • serve one or more parcels on strata lots or on a shared interest of land.

The SSR requires that records of the construction of the onsite system, and of any subsequent alterations to it, be filed with the local health authority. This applies to all properties, including those in remote areas or unorganized territories, whether a building permit is required or not.

What about properties with systems constructed prior to May 31, 2005?

The SSR is not retroactive. However, the seller should be able to prove that the system was in compliance with the regulation in effect at the time the system was constructed. Permits were required for systems built prior to May 31, 2005 and should be available at the local health authority. Please keep in mind that many documents have been lost/destroyed through the years, so the lack of information at the health unit may not necessarily mean that a permit was not taken.

Has the system been planned and installed according to the regulations?

Owners who have constructed a new onsite wastewater treatment system on or after May 31, 2005, or whose systems have been altered or repaired since that date, must have retained the services of an authorized person to plan, install and maintain the system. An authorized person is either a professional engineer or a Registered Onsite Wastewater Practitioner (ROWP). Although systems constructed prior to May 31, 2005 are not subject to this requirement, it is highly recommended that system maintenance be performed by a ROWP.

ROWPS are registered with the Applied Science Technologists & Technicians of British Columbia (ASTTBC), which recognizes four categories of practitioners:

  • Planners, who perform site and soil assessments, design systems, and create maintenance plans for systems,
  • Installers, who install systems according to design plans,
  • Maintenance Providers, who monitor and maintain systems, and
  • Private Inspectors, who inspect and assess existing systems.

Before beginning construction of an onsite wastewater treatment system, the authorized person must file the system’s plans and specifications with the local health authority. Within 30 days of completing the installation of the system, the authorized person must file the following documents with the local health authority, and provide copies of all documents to the owner:

  • a letter of certification;
  • a plan of the system including an As-Built Drawing; and
  • the Operating and Maintenance Manual.

Has the Use Changed?

Where a new use will be made of an existing onsite wastewater treatment system previously permitted under the 1985 Wastewater Treatment Regulation (for example, a house being built to replace a temporary or seasonal dwelling), an authorized person should conduct a site evaluation and a documented inspection of the system to determine if it is suitable for the new use.

If the system requires upgrading, all regulatory filing provisions apply, including plans, specifications and a site evaluation with report.

Has the system been adequately maintained?

All onsite wastewater treatment systems need regular ongoing maintenance. Once an onsite system is installed, upgraded or repaired, it is the homeowner’s responsibility to ensure that the maintenance plan is followed. If the homeowner does not maintain the wastewater treatment system properly, malfunction and possible failure of the system can result, and the homeowner may need to pay for costly repairs or replacement of the disposal system.

The Sewerage System Regulation and the Sewerage System Standard Practice Manual (created by the Ministry of Health) stipulate who may design, install or maintain sewage systems. All work on onsite systems, such as repairs to systems, and any maintenance on systems, must be performed by an authorized person. This includes the regular monitoring and maintenance of septic tanks, treatment plants or processes and dispersal fields (which may be required up to three times per year depending on usage and other conditions that may affect performance).

House with field

Have I obtained all required documentation for the system?

As a licensee acting for the seller of a property with an installed onsite wastewater treatment system, you should obtain the pertinent records from the local health authority in order to verify that:

  • for a wastewater treatment system installed prior to May 2005, the appropriate permit has been issued and the system was installed with the approval and inspection of the appropriate department of the B.C. government; or
  • for any wastewater treatment system installed after May 2005, that it was installed by an authorized person as defined in the Sewerage System Regulation and a Letter of Certification was filed with the local health authority; and
  • records of any major repairs and/or upgrades to the system have been filed with the health authority.

Wastewater treatment systems may be subject to periodic inspections by the local government or the health authority may have issued a work order for a particular system. Licensees should check with the local health authority for the existence of such work orders and inspection reports.

Should the system be inspected?

Inspections of a property’s onsite wastewater treatment system, which are a condition of sale by mortgage or insurance companies, or by prospective buyers, must be performed by an authorized person, either a ROWP registered as a Private Inspector or a professional engineer. ASTTBC recommends that sellers have an inspection prior to listing their property for sale in order to identify any necessary maintenance or repairs. This can simplify the disclosure to buyers and alleviate concerns.

Allow for appropriate time line to book an inspection and to gather all the required paperwork. Accessing the required documents from health authority offices or archives may take several days. Inspections of existing onsite wastewater treatment systems can be challenging and time-consuming, as they may be buried beneath mature landscaping, making the system in some cases difficult to locate and assess, as well as to perform any necessary maintenance and repairs.

Ensure the authorized person receives:

  • all documents from the health authority,
  • land title documents indicating the location of any reserve fields and/or any existing covenants for reserve field easements,
  • records of past maintenance done on the system.

If the system is to be inspected, a clause such as the following should be included in the Contract of Purchase and Sale:

Sewage System Inspection Clause
Subject to the Buyer, at the Buyer’s expense, receiving, reviewing and being satisfied with a report from an appropriate authorized person (as defined in the British Columbia Sewerage System Regulation (‘‘Regulation’’)) concerning the operational function and condition of the components of the wastewater treatment system on the property (‘‘System’’), and compliance of the System with the Regulation on or before (date) .

This condition is for the sole benefit of the Buyer.

What if the inspection reveals problems with the system?

Existing systems that require repairs and/or replacement must be brought into compliance with the Sewerage System Regulation, with limited exceptions. In addition to determining that the system was appropriately installed, a buyer should determine whether any maintenance on the system is in compliance with the Maintenance Plan filed with the health authority.

What disclosure is required?

Sellers must disclose any known problems with a septic system. Typically, a record of pumping (of the septic tank) and a copy of the septic permit (if applicable) is usually sufficient for disclosure purposes. Filing with the health authority is only required if there has been a substantive change to the septic system.

If a Seller has confirmed that an existing wastewater treatment system has been properly installed, inspected and approved, the following clause should be suggested by buyers’ agents for inclusion in an offer:

Seller Sewage System Representation and Warranty Clause
The Seller represents and warrants that:

  1. the wastewater treatment system on the property (‘‘System’’) was installed, inspected and approved by an authorized person as defined in the British Columbia Sewerage System Regulation; and
  2. a permit/letter of certification respecting the System is on file with the local health authority.

If an inspection reveals that the wastewater treatment system for the property does not meet the necessary standards, the contract should provide a clause such as the following:

The Buyer acknowledges and agrees that the onsite wastewater treatment system (“System”) does not meet the approved standards as required and defined in the British Columbia Sewerage System Regulation, and/or that a permit and/or letter of certification respecting the System is not on file with the local health authority. The Buyer acknowledges and agrees that the Seller has not made any representations nor given any express or implied warranties with respect to the System. The Buyer accepts the System, in its present condition, “as is, where is.”

What if there’s no wastewater system on the property?

In the case of a property without sewage services, the contract should provide a clause allowing the buyer to obtain a site assessment by an authorized person for an onsite wastewater treatment system.

Assessing Property for Wastewater Treatment System Clause
Subject to the Buyer, at the Buyer’s expense, having the property assessed (‘‘Assessment’’) by an appropriate authorized person (as defined in the British Columbia Sewerage System Regulation), to determine the feasibility of installing an onsite wastewater treatment system on the property (‘‘System’’), along with the cost associated with the installation of the System, and the Buyer being satisfied with the Assessment on or before (date).

This condition is for the sole benefit of the Buyer.

Our thanks to the Applied Science Technologists and Technicians of BC for their review and feedback on this article.

(ii) Water Supply

In the case of unproven water supply from either an existing or a new source, the buyer will be concerned not only with quality but also with quantity.

When a property is connected to a municipal or community water supply, water is often taken for granted. The rural experience is often quite different — water conservation practices being the rule rather than the exception. When the water supply expected by the buyer disappears, the consequences can be disastrous.

During examinations for discovery in an Alberta case, the plaintiff buyers testified that the water supply was much less than capable of meeting their family’s needs. As a result, a number of extraordinary measures were required. Two members of the family showered in the morning and the other members showered in the evening. They could not do any watering in the yard and they flushed the toilets only when absolutely necessary. That sort of evidence has the potential to generate considerable sympathy at trial.

What should a licensee do when he or she is asked a question with respect to the well? Many buyers do not know the proper questions to ask of the sellers or the buyer’s agent to make an informed decision to purchase a rural property. The water quality and quantity is crucial to a buyer in deciding to purchase a property and a buyer may not be aware of the importance of water quality and quantity.

Licensees have an obligation to avoid error, misrepresentation or concealment of pertinent facts. Therefore, licensees must take reasonable steps to discover the facts pertaining to every property they may list or sell.

When someone says, ‘‘I want the water tested’’, a licensee should be clear what tests the client wants conducted on the water and a condition should be included in the offer to purchase to meet those standards to the buyer’s satisfaction. The test for mortgage approval may be at a lower standard than is satisfactory to the buyer’s personal needs for water quantity and quality. The buyer needs to determine the quality and quantity of water to meet his or her personal needs and then request water tests that will determine if the water meets those standards.

When sellers state that they had enough water quantity for their needs, what does that mean for the buyer? The water needs for each family may be significantly different as a result of the number and age of people living in the house, laundry washed, cattle or horses to water, etc. Does the buyer need the water to be of the quality that babies or individuals with heart conditions can consume?

To minimize potential liability in rural well cases, a listing agent might consider the following practices as a minimum:

  • Secure any representations by the seller concerning the well in writing so as to eliminate any doubt at a later time as to what was said.
  • Does the seller have a well report that verifies his or her information? Have you obtained a copy? Is the well report current? Does it test at the levels necessary to satisfy the buyer’s needs?
  • If a representation based on a well report is to be set out in the listing information, set out the fact that the information comes from a well report and the date of that report. Has the seller experienced any problems with the water supply, on a seasonal or other basis?
  • Are there any restrictions on the use of water by the seller’s household? When acting as agent for a prospective buyer, your duty is to assist the buyer in determining his or her water quality and quantity needs having a regard for all of the inquiries above and also considering the following:
    • If there is no well report or no current well report, recommend as a condition of the sale that the well be tested and approved by the buyer.
    • Determine whether your buyer had any prior experience with wells. If not, ensure that your client understands that the water supply cannot be guaranteed, that a good well can go dry with little or no warning and that even a good well may be subject to seasonal fluctuations.
    • Do not make representations to your client about the sufficiency of the water supply. One family of four people may be able to get by on a two gallon per minute well while another family may need two or three times that amount of water.

Because of the obvious importance of water supply and quality to any rural transaction, prudent licensees will be careful in documenting their files to reflect all of the discussions between them and their client about the water supply and quality.

If necessary, a clause such as the following should be included in the Contract of Purchase and Sale.

Water Quality and Supply Clause

Subject to the Buyer, at the Buyer’s expense, receiving and being satisfied with a report from (name of source of report) concerning the quantity and quality of the water supply on or before (date) .

This condition is for the sole benefit of the Buyer.

Ω If not using the standard form Contract of Purchase and Sale, refer to ‘‘Contracts under Seal

Water Potability Clause

Subject to the Buyer receiving and approving a water potability test report done by (name of service) on or before (date) .

This condition is for the sole benefit of the Buyer.

Ω If not using the standard form Contract of Purchase and Sale, refer to ‘‘Contracts under Seal

In situations where the existing services were not approved or the site cannot be approved for new services, the prudent licensee should protect the parties to the transaction by noting the same in the contract.

Approval Uncertain Clause

The Buyer acknowledges and accepts that the property may not receive approval for an onsite sewage system and that no representations to the contrary have been made by either the Seller or his or her agent.

In some circumstances, where the property is not serviced by municipal water and sewer services, mortgage lenders may require appropriate certificates regarding water potability and the septic system. Also, a well driller’s certificate confirming adequate water flow may be required.

To meet the Canada Mortgage and Housing Corporation’s (CMHC) requirements, water potability must meet the provincial standard, or in the absence of such standard, Health Canada’s Guide on Canadian Drinking Water.

CMHC advises that it will not delay approval of any insured mortgage application pending lender receipt of a potability certificate. The approved lender is responsible for obtaining the required certificates prior to advancing funds. Copies of all certificates must be retained in the approved lender’s file. For further information, contact CMHC at 1-888-463-6454 or visit www.cmhc-schl.gc.ca.

(iii) Water Licences

Trades in real estate involving land where the water supply is not derived from a well or centralized water supply (e.g., municipal or regional district) may involve the existence of a water licence. Licensees who engage in trades of this type of land should advise their clients to check for the existence of water licences. All water licences must be transferred to the new owner, complete with consideration, prepayments or arrears. It is important to note that water licences are not recorded in the Land Title Office. Under the Water Act, a person conveying or disposing of land with a water licence is required to report, in writing, the transfer of ownership of that land to the Water Stewardship Division of the Ministry of Environment, via the local office of the Integrated Land Management Bureau, also known as FrontCounter BC. The Water Stewardship Division can be reached at 1-800-361-8866. The same number can be used to check for the current balance on a water licence account. Further information can be obtained from the Water Licence website at www.env.gov.bc.ca/wsd/.