Who should pay for septic system inspection? Homeowner preferences for mandatory time-of- property transfer policy: evidence from coastal South Carolina

Decentralized wastewater systems serve millions of U.S. households, yet policies governing septic system inspections at the point of property transfer remain limited and unevenly implemented. This study examines homeowner support for mandatory time-of-transfer (TOT) inspection requirements and preferences regarding how financial responsibility should be allocated between buyers and sellers. Using survey data from coastal South Carolina homeowners who currently use septic systems and a multinomial logit framework, we estimate preferences across three cost-sharing arrangements: full buyer responsibility, a 50–50 split, and full seller responsibility. We find that preferences are shaped primarily by personal maintenance experience, localized groundwater-related risk perceptions, and individual risk attitudes, rather than by pro-social values or demographic characteristics. We then discuss the implications for TOT policy, including the challenge of limited data availability, and suggest that developing local groundwater risk databases alongside records of septic maintenance could support implementation and enforcement while easing resistance to cost-sharing arrangements.