# Cmhc and an acreage



## twillo (Jul 15, 2017)

I'm all approved for this mortgage except for one catch. They don't like the "legal" approved septic ejector system on the property. This is in manitoba on 10+ acres with an updated sepetic ejector that was properly installed by a contractor in 2005 following all the rules for diatance location and its design. It's still in compliance. Cmhc said this: It was declined on the basis that it is an open ditch with an ejector. I know it's not an open ditch. I dont even know where they got those words from. If it meets all legalities do they have the right to still say no?

This is quite frustrating to my family. One last obstacle to secure the funding.

Any suggestions or thoughts on this?


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## OhGreatGuru (May 24, 2009)

See https://www.gov.mb.ca/sd/envprograms/wastewater/pdf/changes_phase_out_sewage_ejectors.pdf Manitoba has been trying to phase out sewage ejector systems. Their web site indicates they have adopted some more lenient exemptions since the regulation was first passed in 2010. But it sounds like you would still need to apply for such an exemption. You would have to contact Manitoba environment for clarification. 

Whether or not CMHC would be bound to accept such an exemption is an interesting question. If they consider that ultimately such a system will have to be eliminated, they may consider it an uninsured risk, since the regulation requires upgrade on transfer of the property. And a future government may, at any time, cease to allow exemptions.

So: ask Environment: does it have a certificate of exemption; would I get a certificate of exemption if I applied? Is the certificate exemption for only a specified time period? (it's unclear to me - but considering the intent is to phase out these systems, I suspect they are not issuing perpetual certificates)

Ask CMHC: if I got an exemption would it meet your approval?


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## twa2w (Mar 5, 2016)

twillo said:


> I'm all approved for this mortgage except for one catch. They don't like the "legal" approved septic ejector system on the property. This is in manitoba on 10+ acres with an updated sepetic ejector that was properly installed by a contractor in 2005 following all the rules for diatance location and its design. It's still in compliance. Cmhc said this: It was declined on the basis that it is an open ditch with an ejector. I know it's not an open ditch. I dont even know where they got those words from. If it meets all legalities do they have the right to still say no?
> 
> This is quite frustrating to my family. One last obstacle to secure the funding.
> 
> Any suggestions or thoughts on this?


Read the following link.

http://snj.ca/2015/03/septic-ejector-system-regulations/

Snip

In October, 2009 the Provincial Government amended the regulations of The Environment Act, known as the Onsite Wastewater Management Regulations (156/2009), concerning sewage disposal in the province.

The regulations were as follows:

Prohibit the use of a disposal field for new systems in sensitive areas, Crown land cottage developments, provincial parks and portions of the Red River corridor;
Prohibit the installation of new sewage ejectors (previously were allowed on parcels over 10 acres in size) or the modification of existing systems;
Require the decommissioning of existing sewage ejectors at the time of any property transfer or subdivision that does not comply with amended transfer provisions;....

And second snip

example, the regulations prohibit a seller from transferring, conveying, or subdividing land on which an ejector system is located without taking the system out of service and decommissioning the system. In addition, there is an onus on the seller to notify Manitoba Conservation that the system has been decommissioned within 7 days after the system has been decommissioned.

Purchasers of property also need to be aware of the effect of the new regulations. Simply agreeing to take title to property “as is” without the seller rectifying or decommissioning a non-compliant system could result in the purchasers incurring significant costs and/or exposure to potential liability. Where a purchaser takes title to a property without an ejector system being decommissioned and replaced, pursuant to the regulations, the purchaser is then required to decommission the ejector system (at their cost) within two years of the transfer to them occurring (and this of course typically would then also mean that a purchaser would have to construct or install a new compliant system). In addition, purchasing a non-compliant property may cause you to be in breach of the promises you are required to make to your lender.


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## OhGreatGuru (May 24, 2009)

That's kinda what I thought the supposed "relaxation" was about, but it was not clear to me. It allowed the owner to transfer onto the purchaser the obligation to decommission the system within 2 years, rather than having to remove it before sale. But the bulletin is not exactly a sterling example of clarity.

PS. If you were not made aware of this issue at the time of offer to purchase, it may be time to talk to your real estate agent and/or lawyer.


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## twillo (Jul 15, 2017)

I read that article and it sounds harsh. I find it doesn't compare to what mb conservation has on their own site which says ejectors are still allowed with the exemption. The homeowner is having a environmental officer come out on Tuesday to verify the setup for rule compliance. I've chatted with the officer and he says there's no problem issuing exemptions if the seller does the paper work and everything complies. Using mb conservations own guide book on page 10 all the rules are complied with..all distances. Not a sensative area. Soil types. Land size 10+ acres. The officer will most likely issue the exemption. My question is why is cmhc worried about things that comply with the current rules and how does my mortgage broker convey/ pursued them that it's good to go? It's my last hurdle to get this purchase sorted out. I'm getting hung up something that's a non issue legally, especially once the exemption is secured. It's very frustrating.


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## Just a Guy (Mar 27, 2012)

Your forgetting that cmhc is looking at your property only on paper. They've never seen the property, probably not even a picture of it, they see a pile of paper and need to determine the "risks" of lending you money and their ability to gat their money back if you can't pay for it.

There is a "risk", in their eyes that something about your property may inhibit that. I don't know for sure what it is, but maybe it has to do with the fear that, if they had to foreclose, they may not legally be allowed to sell the property in the future without a large cash injection to correct something that the government has indicated may be an issue in the future...

Now, that doesn't mean the issue is real, or that it could actually happen. That may be the fear of one guy working for cmhc, who's trying to cover his butt looking at paperwork he really doesn't understand (probably lives in a big city and has never even seen a septic system, worse he may be some extreme environmentalist who has issues with any thought of human waste on the planet, you never know). 

It doesn't mean it's a dead deal, it doesn't mean the deal will still be approved...all that depends on the ability of your mortgage broker (and yes the guy at the bank is also just a mortgage broker, even if he's got a different title) to convince (read as "sell") cmhc on the mortgage being a low risk. Remember his commission, and a lot of bank profits, are riding on this, so they want it to work. They will do everything possible to get it done at this point.

What has your banker said about the deal?

Of course, if this bank says no, chances are you could just go into a different bank and get the deal approved. The word "No" doesn't really mean much in the world of banks, I've always found someone willing to say "yes" if you look hard enough, even within the same bank that said no to me several times on the same deal. When it comes to mortgages there are at least 5 different divisions that I know of in each bank with different qualifications and requirements (and underwriters), being rejected by one doesn't disqualify you from the others.


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## twillo (Jul 15, 2017)

Thankyou. My mortgage broker is quite experienced, many many years in the sector and brokered our first home purchase too. She said it's not over yet. This is literally the last speed bump to financing. The quote said was "It was declined on the basis that it is an open ditch with an ejector." My initial thought with this rejection was lac of information and understand as it's not an open ditch for one. It's a properly built ejector system, i spoke with the contractor on this and he used the exact method purposed by mb conservation. All paperwork still exists. I passed it all on to the broker to use as potential proof that it's a non issue. Thanks to everyone who put in to this thread. I appreciate other perspectives to get a better understanding. I also welcome more input. Again thankyou


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## OhGreatGuru (May 24, 2009)

twillo said:


> ...My question is why is cmhc worried about things that comply with the current rules and how does my mortgage broker convey/ pursued them that it's good to go? It's my last hurdle to get this purchase sorted out. I'm getting hung up something that's a non issue legally, especially once the exemption is secured. It's very frustrating.


Find out for sure from Mb what they require. My reading of their web page is that it still has to be inspected and you have to get a certificate of exemption from them, if the owner does not have one that can be transferred to you.

As for CMHC, you are confused between what is "legal" and what they consider an acceptable insurance risk. They are likely not bound by Mb's opinion of these systems. If you default on the mortgage, they inherit the problems of what to do with the sewage ejector system; whether or not the land has been contaminated; and whether or not they could re-sell it without a sewage treatment system.


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## twillo (Jul 15, 2017)

Ok, so far what we have come up with is the following. The bank wants more proof that the rules have been complied with, however, upon contacting CMHC, all they require is the proof that we have already given the bank simply needs to be forwarded by the bank to CMHC. No other authority other then MB conservation has a say in the MB waste water management for rural properties. Its extremely frustrating


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