Septic Disclosures Have Become Very Confusing In The Last Several Years

TAR Legal Counsel WHITE PAPER Regarding Septic Disclosures (F84, F85, F93) 2009

Septic disclosures have become very confusing in the last several years. In an effort to simplify the process, TAR has developed several forms for Realtors® to use. Below is an explanation of the requirements and forms which are available.

First, as you all know, the septic law has changed significantly over the last several years. Several years ago, Tennessee enacted a change to the Tennessee Consumer Protection Act which made it unlawful for homes to be advertised as having more bedrooms that it was permitted to have if it were on septic. Due to the exact wording of the statute, it placed agents on “constructive notice” as to what was on the septic permit. This meant that agents were given the responsibility of knowing what was on that permit whether they had ever seen it before or not. This applied to ALL homes which were on septic. This created many problems for agents, sellers, buyers, and the Tennessee Department of Environment and Conservation employees (TDEC) since permits now had to be pulled for every home that was sold that was on a septic system. In an effort to solve some of these problems, the legislature then changed the law the following year to make the Tennessee Consumer Protection Act only applicable to new construction, and removed the constructive notice provision. However, this does not limit the agent’s requirements for older homes. Although they are not required to pull the permits on every home under this particular law, they may still need to pull the permit on older construction in order to comply with some broad provisions of the Broker’s Act, such as the requirement to exercise reasonable skill and care to all parties to a transaction. Tenn. Code Ann. § 62- 13-403(1). Brokers can require that all septic permits be pulled as a part of office policy. Agents should speak to their brokers to determine when septic permits should be pulled.

If an agent is going to pull the permit, TAR has a new form available to request information from the Tennessee Department of Environment and Conservation (TDEC). This is form F93, which is a TDEC Information Request Sheet. When completing this form, it is important that ALL lines be completed. Unfortunately, the TDEC offices do not have a uniform filing system. In addition, there may also be several different filing systems for the same office. Therefore, provide ALL information concerning that piece of property. You will need to have the following:

1. The current owner’s name; 2. The address of the Property; 3. The county where the property is located; 4. The Map and parcel number for the property; 5. The subdivision and lot number (if applicable); and 6. The original owner’s name.

If you do not provide ALL of this information, the TDEC may not be able to locate the information on this property, even though it is in the office. You may fax this request into the local TDEC office for the sake of convenience. Once the local TDEC office has received your request, they will do a search of their files in order to determine whether they have a file on this piece of property. If they do, then they will send a Field Activity Report back to the agent. This document will indicate whether they have a file, whether a file cannot be found, and whether there are multiple files. It is important to understand that while the permit is important, there may be additional information in that file which may provide additional information which could be very beneficial to buyers and sellers. This information could include any repairs that have been done on the system, upgrades to the system, whether the system truly is suitable for the number of bedrooms the home appears to have, as well as whether the system has ever been found to be in violation of state law. All of these issues will be important to buyers. If any information is available, the agent will then have the ability to go to the TDEC office and request copies for any information contained in that file. If your clients have any questions concerning information contained within the file, they should consult with TDEC officials or consult with their own soil engineer. It is not the agent’s responsibility to explain the documents contained within that file.

Another issue which has arisen is that in some areas, the TDEC offices have limited office hours and agents have been unable to determine when someone will be available at a TDEC office to assist them. In an effort to assist the public (including agents), TDEC has provided a list of all of their offices which includes the address, telephone number, and hours of operation. You can click on the appropriate region at this link to get the office in your area: http://www.state.tn.us/environment/gwp/contacts/. Please refer to this list in order to determine when the office will be open before traveling to that office. It is important to understand that these offices have limited staff and may not be open to the public 8 hours a day, 5 days per week since the staff is also required to go out and inspect sites and issue permits. Most offices do have hours in which someone is there everyday, but only during certain hours so you should check to make sure when someone will be available. Check periodically in order to ensure that you will not make a trip unnecessarily in the event that the office hours change.

Once you have received the information in the file, you can use form F84, the Subsurface Sewage Disposal System Permit Disclosure form to provide it to Buyers.

There is another form which may be useful to agents. This is form F85, the Exterior Injection Well, Percolation Test, and Soil Absorption Rate Disclosure. If the seller has knowledge of the existence of an exterior injection well, any percolation tests or soil absorption rates on a property, they must be disclosed to a buyer pursuant to Tenn. Code Ann. § 66-5-212. An injection well is defined by the Tennessee Department of Environment and Conservation as:

(26) “Injection well” means a structure or other device which is used for the emplacement of fluids into a subsurface stratum including, but not limited to: (a) a well used for the emplacement of fluids; (b) a subsurface fluid distribution system; (c) an improved sinkhole; or (d) infiltration cell and any other structures or devices designed, constructed or used to emplace fluids into the subsurface, except as provided in rule 1200-4-6-.03(3). Rule 1200-4-6-.02

Basically, this is a well with a pump on one end that forces fluids down into the earth. It is usually used for equalizing pressure to combat sinkholes, to improve drainage, etc. They are not common in all areas of the state. However, if they are on someone’s property and they break, they are very expensive to repair. Please bear in mind that the form (F85) for this provided by TAR addresses several different issues – whether there is an exterior injection well, whether percolation tests have been done, and whether there are soil absorption rates done. If any of these exist, they must be disclosed in writing either prior to the contract with the buyer signing indicating that they received it or within the contract (through use of a counteroffer). You always need to ask on all properties that you list. If none of these are present on the property, then you do not have to use this form.