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We want (need) to sell our house. It has an underground oil tank. We converted to gas over a year ago when the 85 year old boiler breathed it's last breath, so there is not oil in the tank, but; we had the soil tested and it has leaked. The house is now rendered non-sellable, and in case it was missed by anyone, the state is officially out of money for underground oil tank/soil remediation and are not accepting any new applications.
Our attorney, when we bought the house 7 years ago, never told us the tank should be tested, he blew it off as no big deal. Our realtor didn't say one word about it (I guess it was an easy sale that way, huh?). We did not know better never having purchased a home with an underground tank before. Now this may ruin us financially. The clean up could be $10k or $200k, no way to know until the can of worms is opened, but either way we can't afford to have it done.
Does anyone have any ideas? We are at a total and complete loss as to what to do, and what was out dream house is now a nightmare.
I assume you didn't have a tank policy? It probably would have been voided when you switched to gas anyway. If the contamination hits groundwater, it gets more expensive -- but some home insurance policies give some coverage for this; definitely check that first, because you'll want to use a contractor approved by them if they do cover.
As to the state funding, i think I understand that they could get funding again in the future and you could still get some reimbursement if that happens. I know that doesn't help now, but worth looking into the paperwork.
I just read that they are still accepting new applications for tanks that ARE leaking but that they will hold onto the applications and will review them in the order that they came in once funds do become available again.
The only other thing you can do is sell the house at a discounted price to a cash buyer as a leaking oil tank is a deal breaker for all mortgage companies, I don't even think a FHA 203k (rehab loan) will allow touch that.
From my knowledge of leaking oil tanks, unless the oil leaks onto a neighboring property or hits an underground water source your regular home owners insurance will not cover you. I'm surprised the township allowed you to convert (as you need permits for boilers/gas conversions) and signed odd on the final inspection without requiring the old tank come out.
This is the perfect example of not buying any house with an oil tank in the ground. They are ruined. I don't have an answer for u. Many people r just walking away from their houses and leaving the keys on the counter and defaulting. Even people that are loaded w/ money r walking away from houses underwater this is called a strategic default. Good luck, u might find a lowballer to offer u pennies on the dollar.
I wouldn't say that this is a perfect example of why you should not buy a home with an oil tank. This is a perfect example of why you need to hire a team of professionals to help guide you when purchasing a home and why you need to be fully educated and do your due diligence when purchasing a home.
One of the major problems has to do with my industry - you take a 75 hour course, pass a state "test" (read: joke) and you are then qualified to counsel someone and guide them through making one of the largest investments in their lives that they will lock themselves into paying on for 30 years.
I'm not putting the blame solely on the Realtor as NativeNJ obviously did not do enough due diligence to learn about what they were buying, nor did he/she research and find a Realtor who had a brain. Which is ok, b/c we all make mistakes - unfortunately this one is going to cost you big.
There is no problem with buying a home with an in-ground tank, provided you test it, make sure it isn't leaking, negotiate the price appropriately and budget for removing that ticking time-bomb from the ground.
I hate to see people in your situation, I truly empathize with you as I have a client who inherited a property with an improperly abandoned in ground tank they are getting ready to have pulled from the ground - and I have to tell her tomorrow that the grant money is out.
Good Luck! I'll let you know if I come up with any ideas for you - and please keep me informed if you happen to come across anything that can help out my client.
~Joey
Last edited by joeymarine; 06-14-2011 at 09:30 PM..
Problem is the state will "accept" the application, but then it will sit, for what they estimate, will be at least 3 years. I want to know what happens once we report a spill? Are we then legally obligated to complete the work in a certain amount of time? Can it sit there after it is reported, for more than 3 years?
From the state website: PLEASE BE ADVISED THAT EFFECTIVE MAY 3, 2011, NEW UST FUND APPLICATIONS WILL NOT BE REVIEWED OR PROCESSED DUE TO INSUFFICIENT FUNDS. New UST Fund applications will be date stamped at the time of receipt and held until such time as sufficient funding becomes available. At that time applications will be reviewed and processed based on the order of receipt.
Our homeowners does not cover anything in regard to leaking underground tanks. We had an oil tank insurance policy when we bought the house, which was only good if we continued to purchase oil from one over-priced oil dealer, and then only if you replaced the tank with a another tank from them after the remediation. We converted to gas then looked into selling our house, with the plan of "abandoning" the tank which we can do in our town, because the properties are quite narrow which can make it near impossible to get equipment into a side or back yard.
This is a difficult thing. As mad as I am at my realtor (who was our "family realtor" until this), I am more mad at our attorney, who went to law school and passed a BIG test (as in the bar) and who I paid money to so that he could assist people like us, who had no knowledge about things like underground tanks, when buying a home.
Can't sell the house, even for pennies on the dollar. It is legally our responsibility to clean up the spill before we can sell it, unless we default and foreclose of course. Which brings me to my next issue of strategic default- the house isn't worth anywhere near what we need it to be to turn a decent profit on it, let alone have enough equity to substantiate paying for an oil spill clean up. We are considering walking away from this home now, which is not something we ever in a million years would have thought we would do.I know we could live here for more than a year basically without paying a mortgage and leave with a decent amount of cash in out hands. I can't even believe I typed that- never, ever, would I have believed we would even think to do this, but I don't know what other choice we have.
We have sought the advice of an attorney who doesn't have much advice for us either honestly.
I don't necessarily think that a "strategic default" is the best plan of action for you as it can effect you and your credit for 7 years. At least a short sale you can buy again 2 years after you close on the short sale. I remember from RE school years ago that EPA has money set aside specifically for situations such as yours - but I am not certain if it's just for commercial properties. In my brief search I couldn't find anything about it, but I also can't remember what it was called. I will see what I can find tomorrow and let you know.
PM me if you'd like to talk about your options a little further - I'm not sure if I'm in your area, but I may be able to give you some clarity, a clearer path and a good name that is local to you.
I don't usually stick up 4 realtors but he is in the business of selling houses, not checking for underground oil tank leaks. Thats your responsibility.
I don't usually stick up 4 realtors but he is in the business of selling houses, not checking for underground oil tank leaks. Thats your responsibility.
Although in my post I did place the majority of blame on our attorney, we have every right to be mad at our realtor. The realtor in this case was to work in the interest of the buyer, which he did not by not saying anything. Furthermore, this realtor had a long-standing relationship with our family, both buying and selling many homes for us. With that long-standing relationship which is similar to any other provider of a service be it doctors, lawyers, even contractors, it comes with a certain level of trust, and we were betrayed that trust. He did not work in the interest of the buyer (us). Would anyone here like to use this realtor now? I bet not.
I never said it was the realtors responsibility to check for underground leaks, but he could have said something to us, and he made a choice not to, knowing it could be a problem for a young family with small children. I was told by the new realtor that we were going to use that she could not believe our realtor did not say anything; that for the last 10+ years underground tanks have been an issue when buying or selling in NJ and she would never allow a buyer or seller to go into a transaction without a tank inspection first.
I don't necessarily think that a "strategic default" is the best plan of action for you as it can effect you and your credit for 7 years. At least a short sale you can buy again 2 years after you close on the short sale. I remember from RE school years ago that EPA has money set aside specifically for situations such as yours - but I am not certain if it's just for commercial properties. In my brief search I couldn't find anything about it, but I also can't remember what it was called. I will see what I can find tomorrow and let you know.
PM me if you'd like to talk about your options a little further - I'm not sure if I'm in your area, but I may be able to give you some clarity, a clearer path and a good name that is local to you.
~Joey
We have already spoken to multiple attorneys and we cannot do a short sale. We will have to disclose and report the spill and then it becomes ours. It's the state DEP who had the money, partially of which they received from the EPA trust. The clean-up is done on a state level for residences (aka unregulated tanks).
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As mad as I am at my realtor
