A home in Arizona not served by municipal city water is likely to have a private well on property or use of a shared well. Under current FHA loan guidelines, a home can share a well with up to 3 other homes (so 4 homes total on shared well for FHA eligibility). What to know about well water in Arizona:
If well performance (flow test) or water quality (content analysis) is important to buyer, they should have well inspected during home inspection period. These water quality tests are a lender requirement on FHA loans.
When the property includes a domestic water well, the Arizona purchase contract requires use of a Domestic Well Water Addendum (DWWA) which must be delivered to buyer, in addition to the Seller Property Disclosure Statement (SPDS), within 3 days of contract acceptance.
Seller must provide information about well registration and ownership, well agreement in the case of shared well ownership, whether the well is on property or off property, whether property is within an Active Management Area (AMA) and name of AMA if any.
The DWWA also requires seller to provide information regarding health hazards relating to well, well flow tests for yield and recovery, whether well has ever failed to produce adequate water for domestic use and any existing problems with water pressure, well pump, pressure tank or other well equipment.
Buyer may disapprove of any items on DWWA within 5 days of receipt, or during the home inspection period, whichever is later. At time of transaction closing, escrow company sends a change of well information/ownership form and transfer fee to the Arizona Department of Water Resources (ADWR).
