Who is responsible when the septic system fails and needs to be replaced, the buyer or the seller?

The owner or operator of the system is the legally responsible party required to upgrade a failing system. Prior to transfer of the property, this is typically the seller. Often, the buyer and seller work out the financial issues as part of the sale of the property. Title 5 does not require that a system be in passing condition prior to the sale, but most lenders will not issue a mortgage until the failing system is upgraded or funds to perform the upgrade are escrowed.

Who arranges for the inspection?

The property owner or facility operator is generally responsible for arranging an inspection. However, prior to the time title is transferred, the seller and buyer may contractually assign responsibility for the inspection, provided that it occurs within the specified timeframes.