Under Ground Oil Tank??? - Posted by HomeBuyer

Posted by Tom on November 21, 2000 at 21:50:32:

If you’re smart you will run from this one, once your name is on the title you can be held responsible for cleanup for years to come.

Under Ground Oil Tank??? - Posted by HomeBuyer

Posted by HomeBuyer on November 21, 2000 at 20:32:00:

I am interested in a property that has an underground Oil tank. I am sure that nobody knows if it is leaking or not. What should I do?
Should I deduct the amount of removing the tank from my asking price? Or should I have the current owner remove it? Is there any creative way to work this out. Oh Yeah I heard if it is found to be leaking the City will condemn the building, so is this a deal to walk away from if it is leaking. Should I be the one to incur the expense to find out if the tank is leaking? I would like to make an offer on the property next week but this seems to be a show stopper.

Thanks in advance

Re: Under Ground Oil Tank??? - Posted by Mike O

Posted by Mike O on November 25, 2000 at 10:01:48:

I live in New Jersey, and just had my heating units converted to gas from oil. I paid $950.00 to have the old oil tank pumped out, and the tank gravel filled. It was pressure tested and had no leaks. But remember, just removing a tank with or without leakage doesn’t remedy a situation for home heating. What will you do convert to gas, put in another tank? Someone mentioned an insurance policy, this would be the best way to proceed. Ask the seller to split costs on the pressure testing, if it passes, you can buy the policy with peace of mind.
PS My tank was estimated at about 50 years old, and was in perfect condition, just be sure not to buy if its a leaker.
Mike O

EXTREMELY serious problems… - Posted by David Krulac

Posted by David Krulac on November 22, 2000 at 20:33:56:

  1. once you are on the title you are forever responsible for any future cleanup even AFTER you have sold.

  2. The soil if contaminated must be hauled to a hazardous waste dump, the same as nuclear waste. Very expensive proposition.

  3. Costs can be $250,000 and go as high as $1million.
    There was an industrial site near here that the cleanup was $25 million.

  4. An attorney friend who owns rental properties removed the home heating oil tanks from the basement, after going to a seminar for lawyers about environmental problems.

Good Luck and be careful out there.

you should find out if it is leaking - Posted by JD

Posted by JD on November 22, 2000 at 14:49:38:

You find out if it is leaking by having an enviromenmental company do a soils test and a pressure/vacumm test. The Seller has probably already done this.

But Wait!!! - Posted by HomeBuyer

Posted by HomeBuyer on November 22, 2000 at 11:30:30:

I spoke to a local tank removal company and they said to just have the current owner remove the tank. If he has it removed then what should I ask for as proof that there are no further dangers posed by the tank. Will the EPA come in and test the soil to ensure it is safe?

Removing contaminated soil is… - Posted by SusanL.–FL

Posted by SusanL.–FL on November 22, 2000 at 10:41:08:

…a VERY expensive proposition.

County officials might have you jumping through hoops for YEARS to come if you sign your name on the dotted line.

Kenny and I found out that the ‘clown’ who leased our commercial property was dumping oil and other contaminants RIGHT onto the ground. :frowning:

We sold the place shortly after that and held the Note. I’m just HOPING that when my buyer goes to cash me out in 6 years that HE doesn’t run into problems when he has pay for a PHASE I, II, or III EPA evaluation. :frowning:

Good luck.

Definitely show stopper potential - Posted by Chicago Steve

Posted by Chicago Steve on November 22, 2000 at 09:41:56:

I wouldn’t spend any money on it unless I had a close connection in the business. I also wouldn’t necessarily walk. I would make my offer contingent upon seller removing and providing a clean bill of health.

Tom’s right. This could haunt not only you for life but your heirs and even thier pets great great grand puppies!

Chances are seller’s not willing to do that and will look for the greater fool but we get deals by making offers, not by walking.

You could possibly get seller to accept perminant responsibility but if he doesn’t have deep pockets your ultimately left holding the bag.

Check with the local EPA and see if they have funds available, maybe tax credits??

Smooth Sailing!

Is it a Residential Tank? - Posted by Ed S.

Posted by Ed S. on November 22, 2000 at 02:43:19:

If so, the problems may not be so dire as previously posted.

Most heating oil providers in my state (WA) offer supplemental insurance coverage with the service agreements at a very reasonable cost that covers tank testing, failures, replacements, as well as contaminated dirt removal. It might be worth looking into if that’s your situation.

Ed S.

Re: Under Ground Oil Tank??? - Posted by BillW

Posted by BillW on November 21, 2000 at 22:26:23:

Yes, you could and probably would become liable, HOWEVER, depending on the situation, it could be a deal IF you do it right.
You’ll need to (hopefully) get the seller to provide you with a PHASE 2 environmental audit on the property. If the seller wants you to pay for it, say no unless you have several thousand to invest on a chance. This audit should tell you the extent of the problem and some sort of estimate to do the cleanup. Cleanup could run into the several hundered thousand dollar catagory and sometimes more, but, if no leaks (not likely), only a small amount to get it dealt with. You can get estimates from tank removal specialists, no problem. You just have to get the whole picture before you do anything. Sometimes these can be good deals. Also, the states often have special programs to help owners meet the costs. Look into the programs your state offers.
Good luck… BillW

Ditto what Tom said - Posted by Randy -IL-

Posted by Randy -IL- on November 21, 2000 at 22:08:34:

I occasionally work for an engineering firm which does these sort of cleanups. Rarely does a property owner profit from the sale of a property which has had things like this wrong with it. The only people I know who buy these sort of properties are specialists in the area. (i.e., gas station owners and environmental engineers)

Unless there is an incredible amount of dough in it for you stay away from it. Better yet, just find another deal to keep your mind away from the temptation of the contaminated property.