Private Well Test Shows Safe Levels—Can the Buyer Still Back Out Over Trace Arsenic?

Q: I represent the seller in the sale of a residential property that includes a well supplying groundwater for domestic purposes.  In accordance with Oregon law, the seller has had the water quality tested for nitrates, arsenic, and total coliform bacteria.  The test results show the level of all three contaminants to be within the state guidelines for safe water consumption.  However, the buyer does not like the fact that any arsenic at all was found in the water and their agent has notified me they intend to terminate under the terms of the Private Well Addendum.  Can they do that?

A: Under the termination provisions in Section 5 of OREF 082 – Private Well Addendum, the buyer may terminate the transaction by providing the seller with a copy of all test reports along with a list of “substantial deficiencies” disclosed in the reports. In this situation, if the test report shows that the contaminants fall within the state guidelines for safe drinking water, there is no substantial deficiency. Therefore, the buyer would not have the right to terminate without putting their earnest money at risk.

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