I WANT TO BUY A WATERFRONT LOT AT SMITH MOUNTAIN LAKE……DO I NEED TO BE CONCERNED ABOUT ENSURING THAT IT WILL ALLOW A SEPTIC SYSTEM?
So you found the perfect waterfront (or off-water) lot. Your friend, agent, or someone else tells you, You dont need to be concerned about having a new septic percolation test because the lot could never have been divided or sold in the first place without a successful soil percolation test. True or false? Well both.
Before 1982, land could be subdivided and sold as lots without reference to the soil conditions. So now there are some lots throughout Virginia that are unbuildable due to the soil conditions. This is certainly not as uncommon as you may think. As part of an investment group, I have personally tried to buy two waterfront lots that didn’t perk (test positive for a septic system) in the past. We had both lots under contract, and on one we had only done the soil test as an afterthought to the contract (this was early in my career!). If we had not spent the money for the test, we would have owned a beautiful waterfront point lot that would have been useful for planting flowers and camping and docking our boat, but little more. And we would have been $200,000 poorer, with no easy way out.
In 1982, the rules changed. Developers had to prove that every lot would allow a septic system or be within access to public sewer. So any lot developed since then will be suitable for a septic system, correct? Well, again, yes and no. In 2001, the rules for septic field sizes changed, making it tougher to get a system on lots with marginal soil. (Septic trench bottoms had been allowed 12 inches above bedrock, but this limit was increased to a minimum of 18 inches, which became a big deal for some lots throughout Virginia). So some lots were developed after 1982 that were fine until 2001 and are not OK today. A lot owner can show you a successful perk test from the 90s, but this does not mean you can get a system on the lot today.
This became an issue recently when a client of mine went to purchase a waterfront lot. The owner had an old permit showing that the lot could support a three-bedroom septic system. The client followed my advice and got a new test. Then another test. And a review. This lot would not allow any septic system at all. Another near-financial disaster was averted.
Fortunately, with additional hurdles come additional innovations. Several alternative septic designs will allow most of these difficult lots to have the benefit of a septic system. I have contacts with engineers and consultants who design and install these systems and we sell lots every year which will require them.
Another alternative is to buy nearby lots for the installation of a system. One of my clients got a great deal on a non-perking waterfront lot and bought two large inexpensive off-water lots across the street with excellent soil. Now he has three lots with three home-building sites and three septic sites. He stands to make a few hundred thousand dollars if he sells these lots or builds spec homes for resale.
An additional alternative is to approach a neighbor to buy rights to a corner of a nearby property to install a system there. A last possibility is to tap into the county sewer system that was recently installed.
By the way, this septic system issue can provide a great opportunity for smart investors to purchase lots at below-market value. Call me if you would like to discuss this further.