Real Estate Development Community Holds Its Breath for New Septic Rules

VERMONT — With the force of a royal decree, the Department of Environmental Conservation on July 1 activated major changes to its rules governing potable water supply and wastewater systems. Among other effects, thousands of properties statewide are now automatically considered in compliance with septic laws, thanks to a scheme named “Clean Slate.”

The rule-changing process began in 2002, when Governor Dean signed into law a set of septic regulations and permitting procedures that were supposed to be implemented and improved over a five-year period. Why five years? “Because it’s so very complicated,” explains DEC [1] Commissioner Jeffrey Wennberg. “The transition was painful in some respects, but it was also beneficial because it gave us multiple opportunities to make mid-course corrections.”

Land development in Vermont has as much to do with zoning and topography as it does with access to potable water and good soils. Unless a piece of property is on a municipal water and sewer system, the ground surrounding a building with plumbing must be capable of absorbing human waste without polluting the water table, and it must contain a reliable source of clean water. For this reason, the state has governed water supply and wastewater systems since 1969. For more than 30 years, those regulations were “basically de facto land use controls,” says Wennberg, not environmental protections.

Case in point: the so-called 10-acre “loophole,” a law that exempted parcels of 10 acres or more from state septic regulation. This handy rule had the effect of encouraging scattered development and sprawl.

How will the new regs look to homeowners and other affected parties? According to an Agency of Natural Resources memorandum dated June 14, Clean Slate “basically grandfathers all buildings, campgrounds, lots, wastewater systems and potable water supplies that were in existence before January 1, 2007.”

Those words are music to the ears of Fred Peet [2], a South Burlington real estate attorney. Clean Slate “clears up the rules a lot,” he says, “because before the law went into effect there were lots of different exemptions that were difficult for the homeowner to understand.” Not only homeowners, but lawyers. Under the old system, an attorney who wanted to certify a clean title had to spend a significant amount of time researching the permitting history of the particular property, then trying to figure out if one of the many exemptions applied.

Harland Miller, the state counsel for First American Title Insurance Company in Burlington, sees Clean Slate as “helpful,” but says it’s a bit of a mixed blessing. “Going forward,” he explains, “it takes the compliance question out of the land records and makes it entail a physical inspection of the property.” In short, a system is in compliance if it has not “failed.”

Act 32 [3], the new law that implements Clean Slate, defines a failed system as one “that allows wastewater to be exposed to the open air, pool on the surface of the ground, discharge directly to surface water, or back up into a building or structure.” But even a system that passes could soon fail — the major concern for homebuyers. Miller suggests that a septic system “is more along the lines of a roof now. You know the roof isn’t going to last forever, so you get an inspection.”

The legislature considered adding a provision that would require an engineer or site tech to inspect wastewater systems and certify that they were functioning properly, but declined to saddle property sellers with an extra closing cost. Still, advises Peet, “Any time there is on-site septic, a buyer should always have someone check to make sure it’s operating properly. It’s a small expense to save a lot of future aggravation.”

Homebuyers and members of the real estate law community aren’t the only ones affected by Act 32. Key among the proposed rules is an application and permitting procedure that shifts much of the workload from the state to the many licensed engineers who submit applications on their clients’ behalf. The rule changes are being considered by the Legislative Committee on Administrative Rules, and could take effect by the end of July.

“The state has significantly increased the bureaucratic burden on the engineer,” asserts Blair Enman, principal and founder of Enman Engineering [4] in Rutland. “Now we have check-lists galore.” That shift, Enman says, compels the engineering and construction communities to over-design and over-build, which “actually ends up hurting John Q. Public” by increasing the costs of development.

Enman isn’t pessimistic about all the new regulations. A clear improvement, he points out, is a rule that allows an engineer to design a system with 150 percent of the necessary capacity, which encourages clustered development by making it more feasible to build on small lots.

Environmental groups are taking a wait-and-see approach to Act 32 and the new rules. Annette Smith, director of Vermonters for a Clean Environment [5], stresses that the greater dependence on competent engineers will make enforcement of non-compliance crucial.

Wennberg explains this relationship: “We can have the best set of plans, but if what the contractor does on the site is not consistent with the plans, then the plans aren’t worth the paper they’re printed on.”

Smith says that history is not in the state’s favor. “If we had a solid track record on enforcement, then there would be more confidence that this shift would result in more environmental protection.”

Wennberg says the DEC is hiring two more compliance engineers to respond to the anticipated doubling of permit applications, from 3000 to 6000.