How homeowners' associations can successfully manage advanced onsite systems.

Wastewater systems are frequently installed as inexpensively as possible and maintained by the developer only until all lots are sold. Then operation of the wastewater system becomes the responsibility of the homeowners' association or individual lot owners.

The average homeowners' association has no understanding of the technology it is inheriting and probably no knowledge of permit requirements. Many homeowners' associations meet only annually, and there are almost always newly elected members. The result is a lack of continuity in leadership. Board members who are willing to dun their neighbors for unpaid sewer bills or to demand inspections are likely to get voted off the board. Even if the board does insist that members pay their sewer bills, it usually has no affordable legal recourse if someone refuses to pay. Most deed restrictions are fairly vague about enforcement issues, and few homeowners' associations can afford to file liens or begin collection action in local court.

As long as the toilets flush, wastewater is invisible.

Still, there is hope for the future: Some existing models--in Kansas and Massachusetts--could be adapted for the management of either individual onsite systems or clustered systems in subdivisions, as long as local regulators are willing to be proactive.

In Kansas, a rural water district was facing wellhead protection issues involving a new subdivision with individual onsite systems. The district negotiated a solution with the developer involving deed restrictions and voluntary compliance with local health department regulations. The final agreement, which was included both in the deed restrictions of each lot and in the plat of the subdivision, was primarily designed to ensure that water wells would be protected. Inadvertently, however, it included some very forward thinking terms in subdivision plat and deed restrictions. The developer was required to install a specific type of advanced treatment system on all lots, subject to approval by the water district. All systems had to be installed by qualified technicians, who were subject to county health department approval. Each system had to be covered by a three-year, prepaid maintenance agreement, continuously renewed, which had to be filed with both the water district and the county health department. If a homeowner failed to renew the agreement, the homeowners' association was required to do so on that homeowner's behalf and to assess the cost of the maintenance agreement plus an administrative penalty fee against the homeowner. If the fee was not paid within 30 days, the homeowners' association was required to file a lien against the homeowner's property. The maintenance providers were required to file annual certificates with the water district and the county health department certifying that the system had been tested and was functioning properly. Any repairs to the system noted in the report had to be made by the homeowner within 15 days of the date of the report, or the homeowners' association was required to make the repairs and collect fees.

This is impressive. Without even knowing about the U.S. Environmental Protection Agency's five models of management, the regulators, the water district, and the developer devised a voluntary plan that ended up making the homeowners' association look much like a true utility. It would be easy to tweak a few items and create a voluntary agreement for any new homeowners' association that adopts the accepted technical, managerial, and financial principles necessary to manage individual onsite systems effectively.

The term "qualified contractor" was not defined in the original document, and the health department would have to be involved in that process. The deed restrictions should grant additional enforcement powers to the health department if a system requires repairs and a homeowner refuses to repair it. In order to streamline enforcement actions, water shutoff agreements should be included in the deed restrictions so that the water can be shut off by the homeowners' association if the homeowner refuses to pay for a maintenance agreement. Responsibility for inspections and deeded easement access should be assigned to both the maintenance provider and the health department. The deed restrictions should allow the health department to exercise some technical oversight by the health department of the type of technology installed by each homeowner.

One simply can't expect every builder or a homeowner to know about the myriad types of onsite wastewater systems or to know what will work best in an area. The health department should be willing to work with the homeowners' association to track all the maintenance records and repairs and maintain a map of the subdivision with all the wastewater systems located and identified. It would be simple to utilize one of the many Web-based databases for tracking operations, maintenance, and maintenance agreements. Representatives of the health department should attend the homeowners' association meetings and work with the association to produce a list of noncompliant systems and provide repair updates. The homeowners' association should meet at least quarterly The beauty of this over-all approach is that it does not require large legislative changes at the state level; individual onsite systems probably will fall under the jurisdiction of local health departments anyway.

The concept relies on the participation of the county government and the local health department. True, local health departments are underpaid, understaffed, and overwhelmed. But if they take this opportunity to prevent subdivision wastewater systems from failing in the first place, these efforts will be less costly in the long run than enforcement. The goal is to get the developer to coordinate with the local health department and agree to require design, installation, and operations standards that can be followed by the homeowners' association long after the developer has moved on. This idea is not farfetched. More and more county governments are concerned about wastewater, and the deed restrictions could require that the homeowners themselves pay an annual fee for oversight by the health department. Homeowners have to pay for road maintenance and upkeep of common areas; there is no reason they shouldn't pay for the local health department to help oversee their wastewater systems.

This idea might also be used by a homeowners' association to manage clustered systems. If some other group like a water district or local sewer authority is not available, there is absolutely no reason that a developer couldn't unilaterally and voluntarily impose the necessary management structure on the homeowners' association by setting it out in the plat and deed restrictions. In fact, this arrangement is exactly what Massachusetts mandates in 310 CMR 15.000, also known as Title 5. Users of shared systems are required to sign a Grant of Title 5 Covenant and Easement. (A simple Web search for Title 5 will bring up the downloadable templates.) Each developer and each subsequent homeowner agrees to incur specific obligations regarding the construction, inspection, maintenance, upgrade, and expansion of the shared system and further agrees to a perpetual deeded easement in favor of the local health department and the state department of environmental protection. The developers/homeowners agree to have the shared system inspected annually by an approved inspector and pumped no less often than every three years. The inspection reports must be filed with the local health department and the department of environmental protection within 30 days of inspection. Developers/homeowners agree that some form of financial security will be maintained on the shared system: insurance naming the regulatory authorities as insurers, escrow accounts, or surety bonds. This financial security guarantees that the system will be repaired in the event that it does not meet Title 5 standards. Developers/homeowners agree that the shared system will be constructed so that they may be denied access to the system if they fail to pay their share for construction, inspection, maintenance, upgrade, and expansion. Finally, enhanced lien authority is granted to the regulators in the event that the users fail to pay their share of the assessed costs.

Title 5 does a nice job of setting out basic guidelines for management of a clustered system. This approach could certainly be voluntarily adopted by developers, local health departments, and state-level regulators. Most states have some sort of provision that allows state-level environmental agencies to delegate some powers to county health departments under special circumstances so that a sweeping legislative agenda would not have to be implemented. The health department should work with the developer to establish rate formulas for the homeowners' association so that operations, maintenance, and capital replacement accounts are funded at realistic collection rates.

Those rates should cover money that could be used to fund oversight by the health department and the implementation of a maintenance and operations database. The deed restrictions should include enforcement powers so that the homeowners' association can collect user fees more easily by shutting off water for nonpayment of wastewater charges.

The health department should assist the homeowners' association with rate revisions as time goes by. In fact, the health department should have a permanent seat on the board of the homeowners' association to ensure continuity. The health department also could develop standard language to offer to developers for use in deed restrictions and could have group meetings for the homeowners' associations that were operating their systems according to these standards.

This approach wouldn't cost the developer anything, and it might make it easier for him or her to get a permit approved. Lots in subdivisions with this superior form of wastewater system management are likely to have enhanced marketability. The concept can be taken one step further and even used to assist homeowners' associations with systems that are not operating properly. At that point, the homeowners are under the gun from an enforcement action and could vote to amend the subdivision restrictions to adopt this type of management system.

Clearly, we can enhance homeowners' associations so that they can successfully manage any type of subdivision wastewater system. Imagine a homeowners' association following detailed management guidelines, enforcing and supporting a rate structure, and overseen by the local health department.

This solution does not fit neatly into one of U.S. EPA's five models. But it is practical, and it would be very easy to implement if county governments and local health departments would step up to the plate instead of wringing their collective hands and claiming they have no way to deal with subdivisions.

Corresponding Author: Elizabeth Dietzmann is an attorney in Rolla, Missouri. E-mail: [e-mail].

(Reprinted, with permission, from Onsite Water Treatment, Vol. 2, No. 2, March/April 2006, www.onsitewater.com/ow_0603_legal.html.)