trouble getting mortgage b/c of underground oil tank? (loan, escrow, California)

[amylauren]

Anyone have trouble getting mortgage b/c house has underground oil tank?

[Donn2390]

Hi again, Amy. I answered your oil tank question in the other section, but since this question is slightly different, I'll go for it.
My experience was in Oregon. I don't know what state you live in, but I'm betting the rules don't vary much from state to state.
I had my home for sale, and discovered it is required to have it tested before I could close escrow. I ended up not selling it, but decided to take care of any problems that existed, or would exist in the future.
I have had must experience with UGT (under ground tanks) in Souther California, and I know having a problem can quickly bankrupt one.
I had a strong suspicion my tank was leaking, so I was expecting the worst. I had an UGT specialist do the inspection. They stick a probe in the ground ad different places and depths around the tank. These probed locations are specified by law. They then send the soil samples to a state certified lab who checks for percentages of contamination. If you are within limits, you get a certificate of compliance.
My tank was within limits, but it had been in the ground for many years, and I didn't want to take any chances. Once it was proven not to be leaking, it was relatively inexpensive to have it abandoned.
There is a law covering UGT which states you own it "From cradle to Grave". In other words, if you installed it in 1950, and you sold the house the next year, you are still responsible for the tank. But try to find the original installer/owner of an old house. If you hire a guy with a backhoe to remove the tank and haul it away, and he dumps it in a ditch somewhere, you are responsible for any cost incurred. The tank belongs to you until it is legally abandoned, and the paperwork certified by the state. That is why you want a licensed UGT specialists to do all of the work, and provide you with the paperwork to absolve you of any responsibility. It's no place to cut corners..!
That is a long way around to answering your question, but I have to believe your state will not allow a home with an UGT to be sold without these certification tests. If it passes, and you buy the home, I would seriously look into replacing the tank anyway, so you never have to worry about it again. If it isn't leaking today, it very well might be tomorrow. It's not to expensive to replace if it isn't leaking. If you replace it, they will replace it with an above ground tank, so you will never have an underground leak.
Even better, if you have natural gas available, as I did, go with NG. It's far cheaper, more efficient, and you don't have to shell out a fortune to fill it. My old tank held 675 gallons. Multiply that by the current cost of diesel heating oil of almost $5 a gallon, and you have to take out a loan to fill the tank. That's $3300.00 for a tank my size. If you use NG, you can get on the level pay plan, and they average out the cost over the year, and you never have to worry about the tank running dry on the coldest day of the year..!
Most gas companies will install the meter for free. They billed me for the installation, and once I had the new NG boiler installed, I called the gas company, they came and saw the new boiler, and tore up the bill for the meter installation.
You realtor should know the rules on the tank, or should at least be able to find out the rules. That is part of selling a house, and it's what you are paying him/her for. Make them earn they pay..!
Be sure and read the site I sent you for Dana Tanks, and call them if you have questions.
Good luck

[TristansMommy]

Originally Posted by amylauren

Anyone have trouble getting mortgage b/c house has underground oil tank?

Actually.. you should have the ground tested to make sure there are no leaks. If there is, and the tank is older than 30 years, you can have a HUGE EPA expense on yoru hands.

If htey had an underground tank and installed a new one.. you need to have them get a cert that the tank was properly abandoned.
If you get the test though, to make sure the tank isn't leaking. you should be fine.

If it is leaking..don't buy the house.. you don't want the headache.

And.. when you move in.. abondon the old tank properly (I beiieve they fill it with sand?) get a cert to the fact and get yoruself and above ground one. I wouldnt' buy my house until it was tested (no mortgage issue.. I just knew it coudl be diasaster). I had to get a new heating system anyway..but I didn't want to hav e an EPA issue..a nd I wanted piece of mind.. to which I have!

[amylauren]

Thanks everyone. We are scheduled to test the tank and the soil on Weds. The owner was fine with it telling us to test whatever we want. If we get a clean report, we will plan on abandoning the tank right after we close. I was told you don't have to get a test to abandon the tank.

[Bill Keegan]

Originally Posted by amylauren

Thanks everyone. We are scheduled to test the tank and the soil on Weds. The owner was fine with it telling us to test whatever we want. If we get a clean report, we will plan on abandoning the tank right after we close. I was told you don't have to get a test to abandon the tank.

In NJ anyway, you don't have to get a test before abandoning it, but part of the abandonment and certification process includes testing the soil around & under the tank.
I believe having it tested is a mortgage lender issue. Some lenders will require the tank be tested or even insured. Others don't require that.