Readers are referred to the writer's earlier memorandum entitled "NEW PROVINCIAL GOVERNMENT RULES FOR WASTEWATER MANAGEMENT SYSTEMS" ("Original Memorandum"). Since sending out the Original Memorandum, the writer has received a number of comments thereon which he believes are worth sharing with interested persons. Words and expressions used in this memorandum which have been given defined meanings in the Original Memorandum shall have the same meanings herein as given to them in the Original Memorandum.
- Might the Amended Wastewater Regulation apply to leased property? Given the number of cottages/recreational properties utilizing (private) onsite wastewater management systems, this is much more than an academic question. Sections 8.1 to 8.3 refer to a/the "land owner" and to a/the "transfer of (the) land". The Amended Wastewater Regulation does not define "owner" nor does it define "transfer", so that arguably, the lessee under a (typically, although not necessarily, long-term) lease of land and any transfer, assignment, etc by the lessee to an assignee might well be caught up under the Regulation's requirements for onsite wastewater management systems. The same analysis applies to Section 14.2 of the Amended Wastewater Regulation dealing specifically with sewage ejectors. If lessees are caught, it is the writer's view that a lessee plus the lessee's lessor would be both obliged to comply with and would both be subject to sanction under the Amended Wastewater Regulation.
- Should purchasers, mortgagees and their counsel require the inclusion of one or more appropriate statements in a seller's/mortgagor's typically taken (at closing) statutory declaration as to possession ("Closing Declaration")? A statement or statements pertaining to the status of the property in relation to onsite wastewater management systems and/or the availability of a ("public") wastewater collection system contained in a Closing Declaration couldn't "hurt". However:
(a) a written statement/advice as to the availability of a ("public") wastewater collection system and/or the likelihood of one becoming available within the next five years issued by Manitoba Conservation would be preferable to a statement to that effect by the seller/mortgagor; and
(b) because a Closing Declaration is not typically taken until just before or concurrently with a closing of a transaction - ie., long after when the sale or mortgage contract is first entered into - the practical usefulness of relying solely on statements in a Closing Declaration is probably minimal. The time when an intending purchaser or mortgagee would want to learn of the status of the property in relation to these matters would be at the time of, and in fact preferably before, when the contract is entered into. That way the contract (sale agreement/mortgage commitment letter agreement) can be adjusted to specify the appropriate warranties and to properly specify who is to do what (and when) in relation to compliance, and in particular, non-compliance, with the applicable requirements of the Amended Wastewater Regulation. Such matters would likely have a bearing on the purchase and sale price or the amount and the timing of advancement of a mortgage loan.
- Septic tanks and fields will be banned for properties which are less than two acres or which have less than 60 meters (198 feet) frontage, and this is so even if there is no available ("public") wastewater collection system. This is a new requirement under the Amended Wastewater Regulation which was not mentioned in the Original Memorandum. While it is possible for a property owner to apply to the government for permission to install a septic tank or septic field type system, there certainly is no guarantee that an applicant would be successful. This is of course of concern to any cottage/recreational property owners who frequently have less than two acres land or less than 60 meters (198 feet) frontage. The Amended Wastewater Regulation does not specify what "frontage" means here - does it mean frontage on a public or road or a private road?
- In the Original Memorandum, the writer suggested that persons who contracted for the sale of affected property before and without knowledge of the coming into force of the amending regulation #156/2009 consider "splitting the difference" of the costs of compliance. It has been suggested to the writer that a seller might reasonably agree that a "50 - 50 split" doesn’t make sense for the simple reason that the purchaser will be getting a substantial benefit from the remedial action that the seller is forced to make prior to closing, and that consequently, the purchaser should pay for most if not all of such benefit. Difficult negotiations may well be in store for sellers and purchasers in this position.
Generally speaking, in considering the matters raised in this memorandum and the Original Memorandum, the writer strongly believes that the following should be done:
(i) As noted above, the time when a (potential) purchaser or mortgagee should be aware of the status of the seller's/mortgagor's property in relation to onsite wastewater management systems is before the underlying contract is entered into. If the underlying contract fails to properly deal with the matter, then by the time that lawyers become involved, it will, in most if not all cases, be too late. Thus the need for potential buyers and potential mortgagees - as well as potential sellers and mortgagors - to be properly educated on the Amended Wastewater Regulation. Hopefully, one can assume that most businesses purchasing real estate or advancing value on the security of real property mortgages will so educate themselves either directly, or through their legal advisors. For the vast majority of others involved, in particular, "ordinary" sellers and buyers of real properties outside of areas served by ("public") wastewater collection systems, that will mean that the usual "gatekeepers", namely REALTORS must be educated so that they can advise and assist their seller and buyer clients to properly complete purchase and sale agreements. The writer is aware of certain efforts being made - and which have already been made - to so educate realtors, and this effort must be kept up and be ongoing.
(ii) It is necessary for the government to clarify certain of the questions which have arisen and which will no doubt arise in the day-to-day application of the Amended Wastewater Regulation. The original memorandum and this memorandum have raised some of those questions, and no doubt those "in the field" will, through experience, raise others. Ideally, these questions should be clarified by further amendment to the Amended Wastewater Regulation, but even the publication of written statements of policy or intention by Manitoba Conservation would be helpful. One significant question raised by one of the writer's correspondents has to do with such correspondent's understanding from Manitoba Environment regarding the disconnection and decommissioning of sewage ejectors. It is this person's understanding that where an owner sells its property to a purchaser who specifically agrees to undertake to disconnect and decommission the ejector within two years from closing, the seller would not be prosecuted. Unfortunately, the way that the Amended Wastewater Regulation currently reads, this doesn't appear to be the case, and in fact, even where a purchaser undertakes responsibility and then fulfills that responsibility to remove the ejector, the seller is still open to prosecution. Clearly, the government should clarify this matter, perhaps by a policy statement.
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