In Colorado, new regulations were enacted regarding septic system requirements that every real estate agent and broker must know. Many other states have not yet put these types of requirements in place, making Colorado an interesting case study in the types of regulations and permitting issues that can arise from septic system issues.
Read the full article on handling a real estate transaction with a problematic septic system that could potentially lead to a real estate lawsuit.
Why Colorado is Different
Due to increased septic system regulations at the state level, several counties and local municipalities in Colorado have passed septic system transfer-of-title mandatory inspections and permitting requirements that may affect your next real estate transaction. As a real estate broker, you need to stay abreast of county-specific septic system permitting and inspection regulations, to keep you, and your clients, out of septic system litigation. This is especially true when you are selling property in a new or unfamiliar county.
Colorado counties with septic and permitting requirements
In 2013, the Water Quality Control Commission of the Colorado Department of Public Health and Environment adopted Regulation #43, entitled On-Site Wastewater Treatment System Regulation (“Regulation #43”). Regulation #43 was adopted in an effort to improve statewide on-site wastewater treatment systems (“OWTS”), widely referred to as septic systems. Regulation #43 established minimum standards for the location, design, construction, installation and alteration of septic systems within the state.
Following the adoption of Regulation #43 in June of 2013, many Colorado counties and local agencies enacted new regulations governing the use and permitting of septic systems. As of January 2017, the following Colorado counties have transfer-of-title inspection requirements:
- Adams County
- Arapahoe County
- Boulder County
- Clear Creek County
- Douglas County
- El Paso County
- Elbert County
- Gilpin County
- Jefferson County
- Park County
- Pitkin County
- Summit County
What this means for Colorado Real Estate Professionals
This means that each time a property in one of the above counties transfers a title, a septic system inspection must be performed. If you are unsure whether the county you are transacting in has any septic system transfer-of-title inspection requirements, call the Colorado Water Control Division at 303-692-6298. You can also check the division’s website at https://www.colorado.gov and look for the most recent “Comparison of Local On-Site Waste Water Treatment System Regulations” chart.
What to do if you are involved in a septic system dispute
What if you have already assisted a buyer or seller in purchasing a property with a septic system? You may have nothing to worry about, as the septic system may have been properly permitted, or the property may be in a county with more relaxed regulations than those listed above. However, if you find yourself on the receiving end of a demand letter from the buyer’s attorney, you should take immediate action and forward a copy of the demand to your insurance carrier.
When to call CRES ClaimPrevent® Risk Management Hotline
If you encounter any of the above and/or have doubts about the next steps in the process to protect yourself from a real estate lawsuit, call CRES ClaimPrevent® Risk Management Hotline (available to CRES E&O policyholders as part of your E&O insurance). They can help clarify legalities in the process of selling a property with a septic system as well as identify potential risks while telling you how to avoid a real estate lawsuit.
By: James M. Meseck and Diana M. Mendez
LAW OFFICES OF WHITE AND STEELE PROFESSIONAL CORPORATION
DOMINION TOWERS, NORTH TOWER
600 17TH STREET, SUITE 600N
DENVER, COLORADO 80202-5406