top of page

Group

Public·9 members

Buying A House With Underground Oil Tank


Buying a house with an oil tank is one of the biggest financial liabilities a home buyer can assume. Buried oil tanks and Aboveground Storage Tanks (ASTs) leak over time, and the oil pollutes subsurface soil and leaches into underground water. Bottom line, oil tank leaks are expensive and owners of contaminated sites are responsible to clean up these leaks.




buying a house with underground oil tank



Environmental regulations dictate what is permissible amounts of oil that can remain in the ground. If oil levels are above permissible limits you have to remediate, remove contaminated soils to clean up the oil. The owner of the property is the responsible party. Small oil tank leak cleanups will cost around $10,000.00 and large soil remediation projects can exceed $50,000.00 even up to $100,000.00. At that point, sellers are motivated not to make a big deal about an oil tank and buyers have to be cautious about buying a house with an oil tank.


Oil tanks are confusing for those involved, as these oil tanks and leaking oil tanks have laws, regulations and liability Oil tanks have liability like that of driving your car, risk is everywhere, but to understand the risk with oil tanks you have to look at the tank on a molecular level.


New tanks today, on average, have of 10, 20, 25 and 30 year warranties, depending on what tank you buy. Clearly the more expensive tank has the longer warranty. The tank on the left has a 30 year warranty, the tank on the right if bought today with a basic warranty would have a 10 year warranty.


Is buying a home with an oil tank a good idea? Well if the oil tank has been replaced and you have a warranty, then you have a good baseline regarding when the tank will need replacement. This unicorn and rainbow scenario is likely three percent of transactions where an oil tank is present. The norm is the seller will say "I bought the house with the tank and so should you".


If you are buying a home with an oil tank, the best advice is to ask the owner to remove and replace the oil tank. The reason being, the tank is most likely well past a reasonable life span, and when it leaks you will not know, it's not a roof where leaks are obvious. It is also not always worth testing the tank due to the age, regardless of if you get a passing tank test, there will be a recommendation to remove the tank due to take age.


If your trying to sell a home with an old oil tank, read the paragraph above. No one wants to buy an old tank, which by all standards (common sense included) is old and should be replaced. If you are the last person holding the straw and are responsible for removing the tank, I am sorry, I would give you the same advice if you were buying a house with an oil tank.


If you are purchasing a property with an abandoned oil tank, be concerned that you are playing with fire. Let's be clear, the concern with any oil tank is if the tank leaks. If the property with the abandoned oil tank has a report that includes soil testing you should not have any concerns, but that is not the common situation when a property has an abandoned oil tank.


The real hurdle regarding a property with an abandoned oil tank is that the owner does not want to do anything with the oil tank. People will say the tank is fine, that they, themselves, purchased the house with the abandoned tank so its fine for those homeowners because they don't have the monies to remove the tank.


I cannot advise having the work performed after settlement as you do not have enough data to determine what would be a prudent amount of money to set aside in escrow in the event that the oil tank leaks. For your reference, a small oil leak can cost $5,000.00 to $10,000.00, with larger oil leaks costing tens of thousands of dollars. In the absence of a written narrative (report) from the tank closure company and associated laboratory analysis that would have been performed during the closure activities, you cannot say that the tank does not represent an environmental issue. Oil tanks represent an unknown financial liability that can affect the value of a home, the ability to obtain a mortgage and homeowners insurance. Since the abandoned oil tank is the hurdle to overcome in a real estate transaction, removing the oil tank is the logical course of action.


Oil tanks abandoned in place means something was done to the tank, like filling the tank with sand, stone, concrete or foam. The question is was the tank cleaned and sampled? A report would help secure this situation and address concerns of a tank leak. This situation commonly has no documentation regarding the tank leak, the reason being is the owner didn't want to find a problem, so no test, no problem can be found. This is legal, but leaves the unanswered question regarding a tank leak to be answered when the property is sold.


Tank abandoned in place with a permit and inspection by township, city or municipality. This is the most dangerous of abandoned tanks as buyer and sellers assume that the permit and inspection portion of the work certifies the tank as non leaking. This is actually not what the town inspects for they inspect for the physical work completed.


Abandoned oil tank, no paperwork, current owner bought it with the abandoned oil tank. Tank was abandoned from a prior owner and there were promises that it was done properly but you have no written documentation.


Tanks abandoned in place and the work was done by the homeowner with some friends. No permits, but a really good story about what hard work it was to do. Yes - this does happen and 99% of the time the DIY tank abandonment is not performed as well as it could have been performed. Think about it if you have never done something before how good are on your first attempt?


Tank abandoned in place, but the tank was actually best served to be filled in place due to obstructions. Meaning there are tanks by pools, under decks, under garages, basically in a location where it would be excessively expensive, even dangerous to remove so the tank gets abandoned in place. This is common on commercial tanks as commercial tanks are larger and longer and removal causes a larger footprint of disturbance. In this circumstance after the tank is cleaned samples are acquired and a report documents that yes a steel object remains on the site, but it is technically no longer a tank as it can't hold liquid (there is a big hole cut into the top of the tank). This is what we do to document commercial tanks that are abandoned in place, you should expect the same for any residential tank. Why an abandoned tank may not have a report is either the owner not wanting to test and find a problem, cost, owner went with the cheapest company (cheap means something is lacking) or simply the company that did the work doesn't test, or isn't licensed for testing.


25 plus years of oil tank work, Curren Environmental can confidently say 99% of oil tanks can be removed. So many abandoned tanks should have been removed but were not. Don't buy a property with an abandoned tank that you are not 100% certain it did not leak.


When and if you purchase the house, and not before you own it and get your lower price, have the underground tank removed (should cost about $1500) and have an above-ground tank installed (about $1000). Now you have a house at a lower price and a new oil tank. It gets better, if the tank is deemed to have leaked, guess what, you can apply to the state for a reimbursement of your cost (contact us for details). Conditions apply like income level less than $250,000 taxable and net worth $500,000. You can convert to a natural gas system or keep oil. Oil allows you to select your supplier and purchase when the price is low, gas does not. Both have their advantages and disadvantages.


I have a client who had the underground tank foam-filled some time ago. They have the permit, the inspection ticket, and the C.A. from the town. The buyer is asking them to remove the tank if they want to sell it to them. What should we do?


Yes, we like to go inside the house if possible to see the basement first, then we electronically scan the exterior of the house with a specialized metal detector. We then provide a written report of findings.


You can call us and we will give you all the information you need to make a completely informed decision. You and your client will be speaking to an NJDEP licensed person knowledgeable and experienced in underground oil tank work. Certified Environmental is available to discuss your needs so please contact us online or call us at 732 534 4892.


Buying a house comes with its fair share of risks, but an improperly handled underground tank can be one of the biggest. A buried heating oil, diesel fuel, or gasoline tank is particularly risky, due to the environmental liability it can cause for your environment. As a buyer, a buried underground oil tank is different and should be separate from the normal inspection process. It is not your responsibility to have to pay to prove the tank is NOT leaking before you buy the house.


Did you know that more and more frequently we see that many banks, home mortgage companies, and even home insurance companies will NOT let you as a buyer to go to settlement on the house UNLESS the UST has been removed or properly abandoned by a licensed tank contractor with proof there is no contaminated soil?


The current property owner received all of the use & lifespan out of the UST, so why would it be your responsibility to pay to remove it and potentially cleanup contaminated soil that can cost several thousand dollars more? A leaking oil tank is not like a leaking roof, you can see a roof leak, you cannot tell if a tank is leaking with 100% certainty until it is removed from the ground and the soil checked below it.


Should I have a tank test done?NO. Do not waste your money on a tank test for a underground oil tank that is over 20 years old, the tank has lived its useful life and any money spent is throwing good money after bad. We have seen old tanks pass tests but then once they were removed, we found them to be leaking. 041b061a72


  • About

    Welcome to the group! You can connect with other members, ge...

    bottom of page