I'm Administrator of a health department so have some knowledge about these things, but I don't have the direct environmental health experience and haven't asked my EH Director about it so take this FWIW. I'm sure Fozzybear has more direct knowledge.

Most septic systems require a certain amount of slope due to problems in pumping sewage uphill.

The bad news is that it sounds to me that the only place with adequate slope on the property in the location where your brother in law wants to place the house must be towards the lake. You can look at different systems to minimize the effluent, but liquids go downhill. Regardless of the system, you will get some additional e colliform bacteria, elevated phosphorus and etc.

The good news is that the effluent's impact on a decent size body of water like that may not be significant. Obviously, ducks, geese, raccoons, and other wildlife routinely defecate in that water now so you would naturally have bacteria anyway. I know our department has approved systems that drain into bodies of water such as that. Volume makes a difference as well as human source.

I would encourage you to call the Health Department Inspector, express your concerns, and ask for more information.

P.S. Will anyone be getting their water supply from the lake?

Please let us know what you find out.

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