Many buyers may not be aware of some of the issues unique to purchases of residential property in unincorporated portions of Boulder County. Three of these – the type of survey to obtain, the obligations associated with the transfer of property served by a septic system, and issues related to water not provided by a municipal water provider - are often misunderstood or overlooked.
Survey Options. The current form purchase contract approved by the Colorado Real Estate Commission gives a buyer the option to obtain and review a “Current Survey” as a condition of purchase. An Improvement Location Certificate (ILC) and an Improvement Survey Plat are identified as examples of a “Current Survey”. Unfortunately, this language, as well as the practices of many title insurers, can perpetuate the misunderstanding that an ILC is a survey. As a result, buyers, who often opt for ILCs because they are significantly less expensive than surveys, may not be obtaining sufficient information to upon which to make their purchase decisions.
Colorado law, as reinforced by language on ILCs stating that the ILC “is not a land survey plat or improvement survey plat, and . . . is not to be relied upon for the establishment of fence, building, or other future improvement lines”, holds that an ILC is not a survey. Nevertheless, many parties wrongfully believe ILCs are surveys and that they accurately identify the locations of boundaries.
A surveyor preparing an ILC in Colorado need only use his “general knowledge” as to the locations of the boundaries of a parcel of property; he does not have to actually locate those boundaries on the ground. Based on this general knowledge, the surveyor takes measurements from the various improvements to where he believes those boundaries to be and depicts that information on the ILC.
An ILC may be adequate for a buyer of property located in an urban subdivision, where the purchaser may primarily be interested in purchasing property within the fences she can see. But this may not be true for the buyer of property which has not been formally subdivided or is in an older rural subdivision. In those cases, property boundaries may never have been marked on the ground, the monuments identifying the boundaries may no longer exist and fences may not be on (or even close) to the actual boundaries. If the specific location of a property’s boundaries is important to the purchase decision, then a consultation with an attorney or licensed surveyor to determine which type of survey will actually provide that information would be appropriate.
Septic Issues. Many rural properties in Boulder County are served by individual septic systems. In 2008, the County adopted SepticSmart regulations requiring the inspection of a property’s septic system at the time of its sale or transfer to a third party and conditioning the sale on the seller obtaining a “Property Transfer Certificate” from Boulder County Public Health.
The burden is on the seller to obtain the required Property Transfer Certificate. The seller must, among other things, confirm the septic system is adequate to serve the number of bedrooms in the residence, and have the system pumped and inspected by a licensed cleaner and inspector. Any deficiencies in the system revealed by the inspection process must be remedied before the Property Transfer Certificate will be issued, or the buyer must enter into an agreement with Boulder County Public Health obligating her to make the needed repairs within one year of the closing.
Compliance with the regulations rests solely with the seller and is a precondition for the property to be properly sold in Boulder County. As a result, it may not be legally necessary to include provisions relating to compliance in the purchase contract. However, better practice dictates that a provision requiring the seller to comply with the SepticSmart regulations be included in the contract.
Water-related issues. Rural properties are rarely served by municipal water providers. Rather, those properties may obtain their water from a well located on the property, a ditch company, an institutional water provider (other than a municipality), or from a combination of sources.
The current form purchase contract approved by the Colorado Real Estate Commission includes provisions allowing for the identification of the water and well rights associated with the property to be sold. In addition, the Commission has approved a “Source of Water Addendum” to be used in connection with the approved form purchase contract. Those documents, if properly completed, should identify most the sources of water for the property. If the source of the water is other than a municipal water provider, then the buyer will need to identify and confirm all of the other sources to insure that there will be sufficient water for the uses he or she intends to make of the property.
Many rural properties obtain their water from wells located on the property. These wells are typically what are referred to as “exempt” domestic wells and are permitted by the State Engineer. All wells permitted by the State Engineer have been assigned a number, usually identified in the purchase contract and Source of Water Addendum. That number can be used to access the State Engineer’s website (http://www.dwr.state.co.us/WellPermitSearch) and search for documents and other information relating to the well permit.
The well permit will identify the amount of water produced by the well and the uses to which that water may be put. It is important for the buyer to determine whether the water produced by the well can be used for all of the purposes intended by the buyer (especially exterior uses) and if the amount of water so produced will be adequate for those purposes. The well permit will not provide any information as to the quality or potability of the water. It is not uncommon for a well permit search to reveal that the permit may not be valid because all of the conditions necessary for a valid permit have not been fulfilled or properly document, or that the permit is not in the name of the current owner of the property. Depending upon the particular facts and circumstances, these deficiencies may be easily remedied.
If a rural property gets some or all of its water from a ditch company or other institutional water provider, it would be appropriate for the buyer to consult with an attorney, particularly one experienced with water-related issued, to obtain confirmation that the quantity of the water available from those sources is appropriate and that the related rights will be properly transferred.
Robyn W. Kube is a shareholder with Dietze and Davis, P.C. Her practice focuses on all matters related to real estate.