Bulletin: IA2009002

Date:
June 10, 2009
To:
All Offices Issuing Policies Covering Iowa Property
RE:
Private Sewer System Inspections

Dear Associates:

The Iowa Legislature has recently passed a Bill, now codified as Section 455B.172, Code 2007, which requires inspection of private sewage disposal systems prior to any transfer of ownership, including seller financed real estate contracts. This new provision will be effective July 1, 2009.

The statute prohibits the County Recorder from recording any deed or other property transfer conveyance until either: (1) a certified inspector's report is provided which documents the condition of the private sewer disposal system; or (2) the buyer has executed and submitted a "binding acknowledgement" with the county board of health to conduct a certified inspection "at the earliest practicable time" and to be responsible for any required modifications.

The currently-required Groundwater Hazard Statement is in the process of being modified to address this issue in part, and to provide information that will assist the County Recorders in determining whether or not to record a conveyance.

As title agents, it is difficult, if not impossible, to determine whether a given property is served by a private sewage disposal system, or is on a municipal sewer system. However, the inability to record a conveyance due to noncompliance with this statute raises serious issues.

In addition, there are currently few, if any, regulations governing inspector qualifications, training, and certification; uniform inspection standards; or even acceptable inspection forms.

Furthermore there are a number of transactions that are exempt from the new statutory requirements.

Effective immediately, any commitments or policies issued in connection with transactions involving Iowa property should contain an exception such as:

Any consequence, including inability to record a conveyance instrument in timely fashion, due to absence of satisfactory evidence of compliance with the private sewer disposal system inspection requirements of current Iowa law.

Such an exception should not be deleted without consulting with Stewart underwriting personnel.

This Bulletin will be amended and supplemented as regulations are developed.

If you have questions related to this bulletin, please contact your local underwriting personnel or Stewart Legal Services.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None