New Requirements to Sell in SLO!

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If you plan to sell a home in San Luis Obispo, you will have another hoop to jump through starting January 1, 2020. On September 3, 2019 the SLO City Council unanimously passed an ordinance requiring a “point of sale” sewer lateral inspection. Many people don’t realize a private sewer lateral (the pipe that takes all your bathroom and kitchen waste out to the City’s sewer main) is the homeowner’s responsibility, even the portion of the lateral that goes beyond the property line (SLO Municipal Code 13.08.390.D). This means that prior to closing escrow on a sale, a property owner is required to submit a Private Sewer Lateral Inspection Report to the City’s Utilities Department and disclose the result of the inspection to the buyer of the property. There are some exemptions that apply for newer construction and condo associations, though it is my expectation that sellers will almost always end up paying for the inspection fee.

While the City will not require repairs to be completed, defective or broken sewer laterals will be left to be negotiated between a buyer and seller. The typical sewer lateral video inspection costs $250-$300, while the cost for full replacement of a sewer lateral generally runs between $8,000-$10,000 and newer technology allows this to be done without trenching in most cases. The most “at-risk” properties are homes built before the 1970’s that have Orangeburg sewer pipes, which were made from wood pulp and tar, before ABS plastic became more widely used. Clay pipes are also of concern, as both are prone to collapse, offsets and root intrusion where sections of pipe are jointed together. In my experience, many property owners may not have any idea their lateral is in poor condition and there are certainly neighborhoods within town where lateral issues are common.

A piece of good news to all this is that the City has reduced permit fees to replace a lateral. Additionally, to incentivize replacement of defective sewer laterals, the City began offering rebates of up to $2,000 for full lateral replacement (or 50% of the repair cost) throughout the City, with a $3,000 rebate available in various “constrained” areas. Furthermore, retroactive rebates of $1,000 are offered through June 30, 2020 to any homeowner who replaced their sewer lateral between July 1, 2017 and August 20, 2019. 

A final piece of this ordinance worth understanding is that there are various other events that could trigger a sewer lateral inspection, which include, but are not limited, to the following:

  1. If a property has experienced a private sewer overflow.
  2. A building permit is obtained to add a bathroom or kitchen.
  3. An increase in the size of the domestic water meter serving a property.
  4. When a property is subdivided.

Contact Graham for more information or a copy of the letter being sent to Realtors about this ordinance at 805-459-1865 or graham@ccreslo.com. Effects of this ordinance are information any buyer or seller should be aware of, without question.

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