Public Water Supply System
A Public Water Supply System refers to a system that is owned by a governmental authority or by a utility company that is controlled by a governmental authority.
When a Public Water Supply System is present, the water quality is considered to be safe and potable and to meet the requirements of the health authority with jurisdiction unless:
- the Appraiser indicates deficiencies with water or notifies the Mortgagee that the water is unsafe; or
- the health authority with jurisdiction issues a public notice indicating the water is unsafe.
The Appraiser must:
- report any readily observable or known deficiencies with the water;
- notify the Mortgagee when water is determined to be unsafe; report and provide a cost to cure; and
- address any impact on value and marketability, and make the appropriate adjustments.
Community Water System
A Community Water System refers to a central system that is owned, operated and maintained by a private corporation or a nonprofit property owners’ association.
If the Property is on a Community Water System, the Appraiser must note the name of the water company on the appraisal report.
For additional information see:
Handbook 4000.1, Sections II.A.3.a.ii.(O)(1) and II.D.3.p.iii – iv available at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh