32.1-164.1:2 - Eligibility for betterment loans to repair or replace failing onsite sewage systems
§ 32.1-164.1:2. Eligibility for betterment loans to repair or replace failingonsite sewage systems.
A. The Board shall establish a betterment loan eligibility program to assistowners with the repair, replacement, or upgrade of failing or noncompliantonsite sewage systems, and the Board may identify sources for bettermentloans to be provided by private lenders, directly or through conduit lenders.In addition, owners may also apply to the Department for betterment loaneligibility to upgrade an onsite or alternative discharging sewage systemthat is not failing, provided such upgrade is for the purposes of reducingthreats to public health, and ground and surface waters, including thereduction of nitrogen discharges.
B. Upon determination by the Department that the owner has one or more onsitesewage systems that are out of compliance with those regulations promulgatedpursuant to this chapter, or in need of repair or replacement, the ownershall follow the requirements in the Board's regulations to initiate therepair or replacement of such systems. If the owner desires to be qualifiedby the Department to receive a betterment loan, at any time before the repairor replacement is completed, he shall provide the Department with an estimateof the approximate cost of such remedial work, which the Department shallaccept. The issuance of a permit by the Department to repair or replace anonsite sewage system, combined with an estimate provided by the owner to theDepartment, shall demonstrate eligibility for a betterment loan. Upon adetermination of eligibility, the Department shall notify the owner inwriting. If the Department refuses the request for an eligibility letter, theowner may appeal the refusal to the State Health Department Sewage Handlingand Disposal Appeal Review Board. It shall be the sole responsibility of theowner to secure the betterment loan from or through a private lender. Localhealth departments may provide a list of lenders available for this purpose.Nothing in this section shall be construed as allowing construction ormodification of an onsite or alternative discharging sewage system without apermit issued by the Department.
C. Betterment loans made pursuant to this section shall be recorded in thedeed book of the circuit court clerk's office for the locality in which theland is located and an abstract of the loan and betterment loan eligibilityletter issued by the Department shall be indexed in the name of the owner.Betterment loans made pursuant to this section may be recorded in incrementsby the private lender as the repair or replacement of the onsite sewagesystem is completed, provided that in no event shall the total amountrecorded exceed the estimate provided to the Department, without theDepartment approving an amendment to the repair permit, and issuing a revisedbetterment loan eligibility letter. The Department may, subject toappropriate waivers for economic hardship, charge the owner a fee not toexceed $50 for each betterment loan eligibility letter request made by anowner. The Department may require that the owner or private lender providethe Department with proof that any betterment loan has been recorded in thedeed book of the circuit court clerk's office for the locality in which theland is located.
The incurrence of a betterment loan pursuant to this section shall not beconsidered a breach of limitation or prohibition contained in a note,mortgage or contract on the transfer of an interest in the owner's property.
D. Where agreeable to the private lender and the conduit lender, if any, alocality may act as the collection agent for the payments made by the owneron a betterment loan. Any such payments collected by the locality shall bedeemed to be held in trust by the locality for benefit of the private lenderand conduit issuer, if any. The locality may receive a fee payable by theprivate lender or conduit loan provider, if any, for such service not toexceed one-eighth of one percent of the payments collected.
(2009, c. 829.)