What Real Estate Agents Need to Know About Small Public Water Systems

If you're a real estate agent representing the buyer or the seller of a commercial property (not a private home), you may have questions about how to best inform your client about a property's water system during a property transaction. A good place to start is to understand if this property has its own water supply (typically a water well), and if so, if it might be a public water system. Public water systems are required by law to meet the requirements under the Safe Drinking Water Act to ensure the water is safe to drink.

According to the Safe Drinking Water Act, a public drinking water system is defined as “a system for the provision of water to the public for human consumption." If such a system has at least 15 service connections or regularly serves an average of at least 25 individuals daily at least 60 days out of the year, then it is a public water system. The 15 connections part of the definition is for a community system, meaning a water supply providing water to at least 15 residential services where people live (their homes). The only examples of a community water system that you might deal with for property sales would likely be a mobile home park or apartment complex with at least 15 residences or 25 residents AND its own water supply.

The rest are all considered “non-community” systems. For non-community systems, which are commercial private properties that are not residential, it means that if the property has its own water supply and at least 60 days a year has 25 people who could be drinking the water, then it is a public water supply. Examples of non-community systems include places many people stop at frequently (transient systems), like restaurants, gas stations, motels, churches, state parks, or rest areas; or places where people spend their day for work, school, or care (non-transient systems), like factories, schools, day cares, or businesses. So there are two types of non-community systems, transient non community water systems (TNC’s) and non-transient, non-community water systems (NTNC’s). TNC’s serve at least 25 people at least 60 days a year, but they are not necessarily the same people. NTNC’s serve at least 25 of the same people at least 60 days a year.

To complicate matters a bit, TNC’s and NTNC’s may have different certification, testing and reporting requirements, although you will need to check with your individual state as the requirements may vary state to state. In Illinois, for examples, the state regulates licensed operators differently for community and non-community systems.

It is important that you understand these differences and can share them with the potential buyer. They may have no experience with managing a public water supply, and being informed in advance and understanding these responsibilities is a critical component of any property transaction. If a property is a public water supply, we would advise the potential buyer or seller to have an inspection conducted to learn more about the system (and help you promote the property if the inspection report is positive). Some states may require a public water supply review or have disclosure requirements when a property changes hands; be sure you check with your state agency.

Other Considerations

It may be that a sale hinges or is held up because it is a public water supply. A possible alternative is to contract with a management entity that has licensed operators and would be responsible for the water supply. Another consideration, if there is a community water supply nearby, would be to determine the feasibility of connecting to that existing supply, thus becoming a water customer instead of a water provider.

In addition, the state regulatory agency may provide informational resources for buyers, sellers and their agents. The Wisconsin DNR, for example, offers a handbook for non-transient, non-community (NTNC) systems as well as one for transient, non-community (TNC) systems. Washington State Department of Health also provides fact sheets to advise parties involved in real estate transactions on owning and managing small water systems.

You can find more resources in our document search by selecting “Non-community systems” as the category, and then using the terms “owner” or “guidance” in the keyword filter. If you have any questions, you can also contact our staff (info@wateroperator.org) for additional help finding information.