According to the new DNR rules, does every real estate transaction with a well need to have the water tested?
No, the new rule only requires the water testing when a well inspection also takes place. Under the new DNR rules in effect October 1, 2014, the well inspection triggers the required automatic well water testing. Per the DNR rules, any licensed well driller or pump installer conducting a property transfer well inspection must also automatically test the well water for coliform bacteria, nitrate and arsenic. This will apply to well inspections conducted on or after the effective date of October 1, 2014.
How can brokers prepare parties for the implementation of the new DNR rules?
The required testing may create issues for pending transactions. If a well inspection contingency is included in the offer, and the well inspection is performed, the water must be tested for coliform bacteria, nitrates and arsenic even if a well water testing contingency is not included. If the well water testing contingency does not include one or all three of the state required tests, the water must still be tested, and the offer will not address the necessary steps to take if the water test results exceed safe levels. Lastly, the additional testing, particularly with respect to arsenic, will likely increase the water testing fees and may result in possible delays. For any future transactions, be sure to include bacteria, nitrates and arsenic in the testing provision of the well water testing contingency.
The buyer and seller had an accepted offer prior to October 1. Do the new rules apply?
It is not a matter of when the offer was accepted but when the well inspection is conducted. In the event the offer was accepted before October 1 and the inspection will be conducted after October 1, the buyer and seller may wish to amend the offer to allow for the testing of all three elements.
Agents and parties should discuss the sudden change in the DNR rules, as this discussion will benefit the parties to parties. Further, if parties want provisions in place to respond should any water test come back with an unsafe or elevated level, it would be beneficial to amend the offer to add a well water testing contingency that covers all three substances.
What if the buyer and seller will not amend the offer?
If there is an accepted offer with a well inspection provision but the well inspection has not yet been conducted, the parties have an opportunity to modify the offer and avoid unanticipated issues. If the parties do not want to do so, the brokers can’t make them. If the test results are good, the parties will skate on by; if parties don’t wish to amend, though, and results are bad, the parties will have to make up a solution as they go, possibly involving attorneys, additional expenses, delays and even failed transactions. On the face of the contract there is no mechanism for any remedy, and the seller can claim it is outside the scope of the contract. The buyer may argue that this health and safety issue cannot be disregarded and may want remediation or a release from the contract.
The WRA Addendum B provides for a licensed well driller or licensed pump installer to inspect the well systems. Can anyone conduct a well inspection?
Since June 2008, the DNR rules have permitted only licensed pump installers or licensed well drillers to conduct well system inspections. This is why the WRA addendum was modified to list these credential holders. Well inspections must be conducted by such individuals. A list, organized by county, is available at dnr.wi.gov/topic/Wells/documents/WellInspectors.pdf.
Do all water tests need to include all three elements?
No, only the water tests resulting from a well inspection when the property is being sold or transferred.
The buyer’s water test revealed a presence of bacteria. The system was then chlorinated, and a second water test must be performed per the contingency. Does the follow-up test need to be for all three elements?
No. Any water test conducted, not as a result of a well inspection, may be for just bacteria. In addition it may be conducted by anyone authorized in the contract; it does not have to be a licensed well driller or pump installer.
The broker received a form from the laboratory, and the results came back as “SAFE” or “UNSAFE” for coliform, but came back with numbers for nitrate. The lab results did not address arsenic. How do you interpret the results?
See the resources at www.slh.wisc.edu/environmental/educational-resources/interpreting-your-laboratory-results.
Are the WRA and local association addenda forms being updated to address the new rules?
Yes, if you use zipForm, a zipForm alert (see red box) will be included when you open the WRA Addendum B, and any local association forms relating to wells and well inspections. This will continue until the addendum is updated. If you use company-prepared addenda or addenda from another forms provider, it would be prudent to review to assure the appropriate modifications are made.
For more information, see DNR's website at dnr.wi.gov/topic/Wells/RETransfer.html as well as the “Well and Well Water Resources” on the WRA's Offer to Purchase resource page online at www.wra.org/OfferToPurchase. Questions may also be directed to Liesa Lehmann, Private Water Section Chief, Bureau of Drinking Water and Ground Water, Wisconsin Department of Natural Resources, at 608-267-7649.
Tracy Rucka is Director of Professional Standards and Practices for the WRA.