The questions and answers in the hotline article this month relate to questions arising out of the use of the WRA Addendum B. Additional resources are included in the October 2014 Legal Update, “WRA Addendum A and Addendum B Revisions,” at www.wra.org/LU1410.
WRA addendum B
Is the WRA Addendum B a state-approved form?
The WRA Addendum B is not a Real Estate Examining Board (REEB)-approved form. Only forms with the WB identifier are promulgated by the REEB. Because the WB-approved forms don’t meet the needs of all buyers and sellers, pre-prepared addenda can be used in transactions to reflect the needs and the agreement of the parties. The WRA Addendum B is designed for use when the property is not served by municipal sanitary or water systems. The addendum can be used when there is a private sanitary system, or private on-site wastewater treatment system (POWTS), or the property is served by a well, allowing for inspections and water testing. The contents of the Addendum B were drafted in conjunction with staff of the DNR and DSPS to assure compliance with state laws and codes.
What is the most current WRA Addendum B?
DNR rule changes for water testing late in 2014 initiated the latest revision of the WRA Addendum B. As of the end of 2016, the addendum was last revised to adapt in response to changes in the law and has a 2014 copyright date.
Are the buyer and seller required to have well water tested when there is a property transfer?
The rules adopted by the DNR in October 2014 do not technically require water testing at the time of transfer. However, the DNR rules require any licensed well driller or licensed pump installer conducting a property transfer well inspection to automatically collect and test the well water for testing. So although a well inspection is not required under the DNR rules in Wis. Admin. Code § NR 812.44, if a well inspection is conducted, the water must be tested. Testing for coliform bacteria, nitrate and arsenic is required for each potable well on the property.
For purposes of a transfer of real property, can anyone conduct the well inspection?
According to NR § 812.44, an inspection must be done by a licensed well driller or licensed pump installer. The licensed well driller or licensed pump installer, when conducting a property transfer well inspection, is required to use the DNR forms for reporting. Information about property transfer well inspections is available from the DNR at dnr.wi.gov/topic/wells/retransfer.html.
What is water being tested for per the WRA Addendum B?
The addendum is designed for flexibility. The WRA Addendum B allows the buyer to include a water testing contingency by checking the box on line 8, or the buyer may automatically select a water test if a well system inspection is included in the addendum. Given the DNR rules, the Addendum B was structured to automatically include testing for coliform bacteria, nitrates and arsenic when a well inspection contingency is included. Depending on the location of the property, the buyer may also include other substances for testing at lines 12 and 13. In addition, by using the Addendum B, the parties address the steps to take if the results exceed safe levels as well as the provisions to determine the parties’ rights and responsibilities with respect to the water tests and the test results.
Arsenic: Point of entry or point of use?
If a water test was conducted in conjunction with a well inspection, and the water test revealed high arsenic levels, what is contemplated as a sufficient cure under the right to cure provision in the WRA Addendum B? Can the buyer request a Point of Entry (POE) remedy?
When drafting the offer, the buyer may choose whether the cure may be made using point of entry (POE) or point of use (POU) mechanism. If the buyer prefers a POE system, the buyer can strike “may” at line 21 when drafting the offer. Unless countered, the seller may install a POE device if the arsenic levels were elevated. The WRA Addendum B at lines 20-22 provides:
If a well water test report reveals unsafe levels of any substance listed on lines 12-13 and Seller has the right to cure, Seller (may) (may not) [STRIKE ONE] (“may” if neither is stricken) cure through installation of Point of Use (POU) water treatment devices approved by the Department of Safety and Professional Services (see http://dsps.wi.gov/php/sb-ppalopp/contam_alpha_list.php).
In addition, the addendum at lines 81-83 provides:
Well Water Mediation. If a well water test report reveals elevated levels of a contaminant, the Parties may request suggestions regarding mediation from the well driller or pump installer who inspected the well or seek information from any licensed well driller or pump installer.
After the water results are returned, the parties may consult with the driller or installer about what possible or potential cures would be appropriate. The discussion will include information from the DSPS and federal regulations. Unless “may” is stricken, the seller may cure with a POU installation unless the parties amend the offer to provide otherwise. The EPA has information regarding the differences between POU and POE systems at cfpub.epa.gov/safewater/arsenic/arsenictradeshow/arsenic.cfm?action=Point-of-Use. Additional EPA information regarding arsenic in drinking water is found at www.epa.gov/dwreginfo/chemical-contaminant-rules.
For more information about arsenic in well water, see the “Arsenic in Well Water: Understanding Your Test Results” brochure by the Wisconsin Division of Public Health at www.dhs.wisconsin.gov/publications/p4/p45012.pdf.
Bacteria: Well water chlorination
If the water test results indicate bacteriological contamination, what is the process if there is a seller right to cure?
The process and time frames for disinfecting a well where the water test came back as “unsafe” or positive for coliform is set forth in lines 77-80. If the initial well water report indicates bacteriological contamination, the seller may “shock” or chlorinate the well and retest up to two times, with the deadlines for the buyer’s receipt of the report and for closing extended for up to 14 days. After a report of bacteriological contamination, the seller must produce two safe water reports to satisfy the well water contingency, unless otherwise agreed in writing. See the Wisconsin State Laboratory of Hygiene pointers at www.slh.wisc.edu/environmental/educational-resources/interpreting-your-laboratory-results. When negotiating the offer, if the parties wish to establish different standards or parameters, they may do so in the Additional Provisions section at the bottom of the first page of Addendum B. Once reports have been provided, the parties may also speak with the well inspector and amend the offer to provide for a mutually agreeable solution customized for the specific situation. See the Well Water Mediation language above.
Private on-site wastewater treatment system (POWTS)
Can anyone conduct a POWTS inspection?
No. Because a POWTS may have several different components, different professionals may be needed for a comprehensive evaluation of some POWTS. The POWTS Inspection Contingency includes a somewhat lengthy list of different types of contractors who may perform a POWTS inspection. The report must be from a county sanitarian, licensed master plumber, licensed master plumber-restricted sewer, licensed plumber designer, registered engineer, certified POWTS inspector, certified septage operator and/or a certified soils tester. As is noted at line 45, different professionals may be needed to inspect different system components.
To see descriptions of each credential holder, see pages 7-8 of the October 2014 Legal Update, “WRA Addendum A and Addendum B Revisions,” at www.wra.org/LU1410.
Does the Addendum B need to be signed by the seller to be a part of the offer?
An addendum does not need to be initialed or signed to be a part of the offer. The WRA Addendum B includes lines for the buyer and seller to initial and date. So long as the addendum is properly incorporated into the offer to purchase, the terms and conditions of the addendum become a part of the offer. A licensee can incorporate addenda into the offer to purchase by listing the addenda in the offer’s Addenda provision in the line that reads “the attached _______ is/are made part of this Offer” and then attaching the addenda to the offer. Firms should confirm that all addenda referenced in the offer are delivered to the parties and, when possible, are initialed or otherwise acknowledged to minimize later disputes.
Tracy Rucka is Director of Professional Standards and Practices for the WRA.