Due Diligence on Septic and Well Water

Carl, I clearly said 100’ was the residential standard, I went on to say that the commercial standard can be quite different.

Nitrates are actually very easy to remove, you use a process called ion exchange, which is nothing more that a water softener with a special resin bed. Even basic water softeners will remove some of the nitrates. They use either standard salt or potassium to flush the resin bed clean, I can get into more detail of the actual operation if you want.

Phillip covered much of what I was going to say.

Carl, have you had a well test high for nitrates/nitrites? Just because it’s not common to have it elevated doesn’t mean the EPA isn’t going to justify its existence by regulating it.

Most govt backed loans require wells to be tested for lead, coliform, and nitrates/nitrites. All are easily dealt with in the vast majority of the cases.

Great discussion. One of my favorites all time on this forum. Thank you all for the information.

In light of this discussion and the recent Flint, MI water contamination disaster, we’re publishing a short article on relevant insurance coverages for park owners soon in the MHP Store Newsletter. That said, here’s a few more insurance/risk items of note:

  1. Historically, we’ve seen very few liability claims associated with septic or water system pollution. Frankly, less than I would have expected;
  2. If you have a third party inspector of your water system, they can add as a nice liability buffer if things go bad as they generally carry pollution liability coverage;
  3. water contamination coverage ("on premises product liability’) coverage is present in some park insurance packages but not in most. A key form to have in your commercial general liability policy is CG 2407 - nice to have IF your insurance company will give it -a few will but most won’t; and
  4. You can buy your own pollution liability policy but they are expensive on a per park basis - usually starting at $5,000 - so we have very few clients that buy them.

Carl, I am going under contract with a 40 space park in Richland County, Ohio which has a well and city sewer. This is my first park and after reading your input, I am getting the strong impression that I should steer clear of parks with wells due to our unpredictable EPA. The park was built in the 50’s and per the well log it shows yellow clay to 15 feet, blue clay snd gravel from 15 feet to 41 feet and yellow sandstone from 41 to 130 feet. The Seller has a man in the park test the water daily (Seller apparently trained him because the Seller became licensed through the State). In addition, the Seller tests himself twice weekly and has r an engineer test monthly. I know nothing about any of this but I am willing to learn. I live in California though and the park is in Ohio. The Seller said he would continue to test for me for a small fee since he lives in the area. I would appreciate your thoughts and anyone else’s. i am thinking perhaps I should steer clear of parks with private utilities. Thanks, Shelly

Yup. Steer clear. Way clear. And being 2,000 miles away is another thing to avoid. And you’ll have a much harder time selling the park.

Run.

It is all about risk/reward. The challenge is understanding the risk and this comes from educating yourself on the operational and regulatory side of the water or sewer business. Once you have a decent knowledge base four things will make any private utility park thrive or fail: proper due diligence pre-purchase, proper purchase price, proper daily operations, proper compliance, and being well capitalized to handle any equipment failure or regulatory changes. I believe that the risk of having wells or a sewer system in a park can be understood and can be as profitable or more profitable than parks with city water and sewer. Because of this belief I have invested significant amounts of time helping people out pre-purchase and post purchase. Check out the resources we have put on our website

I have a standing offer to a free phone call to help park owners or purchasers outwith the diligence or operations of their utilities.

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This DD list is stellar Phillip, thanks!

Are you able to give a ballpark estimate of reasonable cost ranges to operate a well and/or septic based on the amount of usage/size?

For a Ball park nonbinding estimate :wink: I would need to know the following. The more you have the better the ball park

Well water system

of wells size and deepth

Well Pump info would be great
Booster pump info would be great

of home served

of gallons pumped

Any treatment being done (chlorination, Ph, iron…)
Who is operating it day to day (manager, contract operator…)
What state it is in

Septic… tank and drain field
Number of tanks
Homes per tank
Pressure or gravity style system

Other wastewater such as sand filter, lagoon, package plant could be worked up as well but have huge variability and need to be looked at on a case by case basis

I will have an onsite as well as an offsite manager so does the distance really matter?

Yes distance can matter. It sounds from your description that there is only 1 well. Mechanical electrical components will fail. Lack of redundancy turns a minor issue into a now emergency. If you have redundancy and competent onsite and off-site management the distance is not as big of a deal. I run a repair company for wells and pumps as well as complete management for multiple water systems and sewer systems. 99 percent of “emergencies” happen after hours, on weekends or in the middle of a storm. In November I had a mainline break and had 33 homes out of water had to due the repair in between lightning and thunder storms. Yesterday replaced a blower motor for aeration on a package plant 17 degree weather 18" of snow. Package plant was starting to freeze into a poopsicle. I’m not complaining nor am I always the one out doing the repairs in the crazy weather. My point is stuff breaks if you have redundancy it may not turn into a now emergency. Knowing which water or sewer systems will be a contenual headache and staying away will make you have less gray hair

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I’m not saying don’t buy the park I’m saying know what your getting yourself into. City utilities will be less drama on the supply side but you still have mainline leaks in the distribution system.

Certainly city utilities are preferred but i would not walk away from a good opportunity with a well or septic. It is important to do your due diligence on them just as you do for all the other components of the park. Just remember that everything is local, some places are easy to work with others are almost impossible. I would start with the County or City Environmental Health dept.

As previously mentioned they can be expensive to replace and many times “fixing” them is not an option due to regulations. I had a small section in a park that we just finished replacing for 13 units and the all in cost will end up around $9000 per unit. Fortunately i expected this when negotiating the park purchase. That section should give me 30 years of very little issues. Again, i would prefer city services but you can make money with Septic and Wells in the right situation.

Thank you for your input. It really helps a lot as I am being pulled in two directions.

Carl,

Do you happen to know if Ohio requires the nitrate reducing system?

Thank you!

It is recommended to use a 1000 gallon septic tank as a starting point. That is a minimum and is suitable for a 2 bedroom, 3 bedroom house. Some recommendations say to add an extra 250 gallons of septic tank capacity for each bedroom over 3 bedrooms