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Old 07-16-2013, 12:09 PM
 
Location: Randolph, NJ
4,073 posts, read 8,946,091 times
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Quote:
Originally Posted by Marc Paolella View Post
Just to clarify, the so-called insurance pays if the expense is negligible. If the aquifer is involved, and the real money starts rolling, it will be your money, not the insurance company's. Tank insurance is really more of a service contract, it is not true insurance in any real sense. That is why I cringe when I am representing a buyer and the seller's agent says something like this: "Yes it has an underground oil tank, but they have tank insurance so no worries." YES WORRIES. That literally drives me crazy.

I agree that calling it "insurance" gives too much comfort. But the coverage is much more than negligible expenses -- if there is a leak, it can easily cost 10's of thousands without even affecting the groundwater and the tank policy can cover almost all of that.

But the real expenses do hit when you hit groundwater. If you're very lucky your existing homeowner's policy might give coverage for this but I don't think many (or any) new policies will give coverage.
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Old 07-16-2013, 01:42 PM
 
850 posts, read 1,323,860 times
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Quote:
Originally Posted by HalfFull View Post
I agree that calling it "insurance" gives too much comfort. But the coverage is much more than negligible expenses -- if there is a leak, it can easily cost 10's of thousands without even affecting the groundwater and the tank policy can cover almost all of that.

But the real expenses do hit when you hit groundwater. If you're very lucky your existing homeowner's policy might give coverage for this but I don't think many (or any) new policies will give coverage.

HalfFull is correct. Tank insurance (or "insurance") will pay to remove dirty soils to the water table. So, for example, the water table is at 15 feet and soils are dirty to 10 feet - you can have a lot, if not all, of this cost covered by the tank insurance. If groundwater is shallow, then you have less coverage, but you still have some. As to homeowner's insurance, there may be coverage. If you have had the house before 2006-2008, you have a better chance to have homeowner's insurance. It was around then that the fuel oil exclusion policies started rolling out from the insurance companies (i.e. they dropped coverage of tanks). Current policies don't cover tanks - not even at higher cost, as far as I know.
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Old 07-16-2013, 03:09 PM
 
23 posts, read 54,493 times
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Kiru,

You are very knowledgeable about underground oil tanks so I was hoping you could give me some advice. There's a lot of bad/conflicting information out there so I hope you can help!

In 2011, I (naively) bought a house that had an underground oil tank. The tank had been abandoned and filled and the house switched to gas in roughly 2006 and it was certified at the time that it had not leaked. I have this paperwork from the seller.

In 2012 I paid a company to take out the oil tank and it turned out that it actually had leaked. The tests on the soil were above the acceptable limits so I now have a contaminated site. The cost to remediate the soil (with no guarantee that would be the end of it) was way too high to pay so I've just been waiting since then. What kind of options do I have?

By the way, I think the company that I used for the tank removal and soil testing was kind of shady, but they were a certified company. No changing that now though.
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Old 07-16-2013, 03:24 PM
 
Location: Randolph, NJ
4,073 posts, read 8,946,091 times
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Quote:
Originally Posted by cab4656 View Post
Kiru,

You are very knowledgeable about underground oil tanks so I was hoping you could give me some advice. There's a lot of bad/conflicting information out there so I hope you can help!

In 2011, I (naively) bought a house that had an underground oil tank. The tank had been abandoned and filled and the house switched to gas in roughly 2006 and it was certified at the time that it had not leaked. I have this paperwork from the seller.

In 2012 I paid a company to take out the oil tank and it turned out that it actually had leaked. The tests on the soil were above the acceptable limits so I now have a contaminated site. The cost to remediate the soil (with no guarantee that would be the end of it) was way too high to pay so I've just been waiting since then. What kind of options do I have?

By the way, I think the company that I used for the tank removal and soil testing was kind of shady, but they were a certified company. No changing that now though.
Unfortunately, your options are limited. As a certified company that contractor must have identified the site with the NJDEP, so you will need to get it cleaned up before you can hope to sell the house. But I would speak to your attorney about whatever claims/paperwork that the seller provided. You might have some recourse.
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Old 07-16-2013, 03:35 PM
 
11,337 posts, read 10,977,478 times
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Quote:
Originally Posted by HalfFull View Post
I agree that calling it "insurance" gives too much comfort. But the coverage is much more than negligible expenses -- if there is a leak, it can easily cost 10's of thousands without even affecting the groundwater and the tank policy can cover almost all of that.

But the real expenses do hit when you hit groundwater. If you're very lucky your existing homeowner's policy might give coverage for this but I don't think many (or any) new policies will give coverage.
What it covers is subject to soil composition and water table height. However the overriding point is that the insurance should not provide anyone with an excuse or comfort to purchase a home with a UST.

Here is the future for homes with underground oil tanks:

1) Can't be sold
2) Can't be financed
3) Can't be insured

We are in the early-middle stages of this now. It's only a matter of time.

If you have an underground oil tank, GET RID OF IT ASAP, whether you are selling or not. Alternatively, plan to die in your house and pass the problem on to your kids or heirs.
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Old 07-17-2013, 06:12 AM
 
850 posts, read 1,323,860 times
Reputation: 1646
Quote:
Originally Posted by cab4656 View Post
Kiru,

You are very knowledgeable about underground oil tanks so I was hoping you could give me some advice. There's a lot of bad/conflicting information out there so I hope you can help!

In 2011, I (naively) bought a house that had an underground oil tank. The tank had been abandoned and filled and the house switched to gas in roughly 2006 and it was certified at the time that it had not leaked. I have this paperwork from the seller.

In 2012 I paid a company to take out the oil tank and it turned out that it actually had leaked. The tests on the soil were above the acceptable limits so I now have a contaminated site. The cost to remediate the soil (with no guarantee that would be the end of it) was way too high to pay so I've just been waiting since then. What kind of options do I have?

By the way, I think the company that I used for the tank removal and soil testing was kind of shady, but they were a certified company. No changing that now though.
That's a tricky one. Just to clarify, you have the following documents:
1. Abandonment report with approvals from NJDEP
2. Certification that it did not leak - I assume a tank pressure test?


If you have these documents, it sounds like you might qualify for the Innocent Purchaser Defense under the Spill Act. In order to qualify as an innocent purchaser you must:

1) have owned the property after the spill occurred - you have that

2) have had no reason to know the property was contaminated when you bought the house - (If you have a pass on the tank pressure test, I'd say as a consumer, you had a high level of confidence the UST hadn't leaked. The abandonment documents from NJDEP may reference those results and if the NJDEP still approved the abandonment, that would mean to me that they too believed the UST hadn't leaked.) - you most likely have this

3) You did not discharge the substance yourself, i.e. you used the UST or another UST/AST then stopped it's use. Get documents (town permits, etc) proving the house had been converted to gas prior to your buying it. - you have/can get this

4) You gave notice to the NJDEP when the spill was discovered. Find out if the company called the NJDEP Hotline. You should get a case number in the following format: 00-00-00-0000-00, which gives the date, time, and operator number who took the call.

If you have all the above, you can probably use the Innocent Purchaser Defense to make the former property owner (and their insurance company) the responsible party. This will save you the cost of cleanup (though you'll have to pay for the attorney), but it will probably take a long time. Your best bet is going after the old insurance companies because prior to ~2006, the homeowners insurance likely covered the UST.

The reason a lot of homeowner Innocent Purchaser Defenses fail is because the courts say homeowners should do full due diligence, which means more in the environmental field than just a home inspection. But in your case, I'd say that you did do due diligence. You obtained the abandonment and testing results which were approved by the NJDEP. Therefore, I'd say you had no reason to distrust the NJDEP and you satisfied due diligence requirements for the tank.

I'm not a lawyer, but this is my opinion. If/when you speak to a lawyer make sure you compare their costs for getting you out of it with the cost to cleanup yourself. Environmental attorneys are usually more expensive than the typical lawyer.

Good luck!
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Old 07-17-2013, 07:12 AM
 
23 posts, read 54,493 times
Reputation: 17
Thank you so much for the reply Kiru!

I will have to check to see exactly what the documents from the original seller are. It does look like I might qualify though. Numbers 1, 3, and 4 I definitely have. I did receive the letter from the NJDEP with the case number soon after the contaminated soil was found. I will have to see exactly what tests were done when it was abandoned originally, but you have given me a great place to start. Thanks again!
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Old 08-13-2013, 03:09 PM
TR2
 
7 posts, read 21,617 times
Reputation: 12
Kiru or others out there who've gone through a heating oil tank remediation, I seek your helpful knowledge. I had an Above Ground Oil tank leak about 3 years ago (condensation built up in tank and cold spell in winter must have frozen in a rusty crack and caused a leak). I caught the leak the day it happened but I calculated approx. 40-60 gallons leaked into the ground below. Called the Dep and notified them of the leak, got a claim number. After going back and forth with insurance company, they did have a fuel oil exclusion policy not covering anything so it's all out of pocket at this point. Talked with environmental lawyer, and he confirmed same. At this point I have had a contractor removed most of the contaminated soils except whatever is right under the footing of the house since the tank was right next to it. They also did an EVR vac truck to remove free product from water table (ground water is approx. 6'-7' below grade). At this point I'm out of money and the DEP has never contacted me to move forward with any further remediation. From anyone's experience what is the likely hood of the DEP to come after me (i'm assuming i'd have to declare bankruptcy since you can't squeeze blood from a stone) or a time frame in which I should have to perform any additional remediation. I did do a ground water test a few years ago and it came in over the state standards barely (as described by the enviro consultant) so not sure where else to proceed or if I can wait until either I can save up enough money or the state to come in and try to force my hand at any cleanup which is not possible. Any feedback is appreciated.
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Old 08-13-2013, 03:18 PM
 
Location: Randolph, NJ
4,073 posts, read 8,946,091 times
Reputation: 3262
I don't think the DEP will "come after you". But the problem is that you will have an open case with the DEP that will surely become an issue whenever you look to sell your home. So I think timing is flexible as long as you won't have to sell the house.

One key is to be using a contractor that is approved by the DEP and I believe they have a list on their website. A qualified contractor should be able to lay out the steps needed to get a No Further Action letter. And if you need to go under your foundation, you really need a good contractor/engineer to make sure you don't mess up your foundation.

It is scary that you mention groundwater being impacted. That can mean significant more remediation and test wells, etc.
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Old 08-13-2013, 04:40 PM
TR2
 
7 posts, read 21,617 times
Reputation: 12
Half full- time is not really an issue right now, so at least I have that going for me...

I did my research and the contractor that had removed the soils was licensed and qualified with the state and I have all the disposal paperwork. The groundwater part does suck, but I guess all I can do is re-test when I can get the funds available and see where it is at. Not sure how well natural attenuation will work, and I know there are a ton of variables to determine the effectiveness but it couldn't hurt at this point. I have very sandy soils so I'm hoping that may help. It's pretty much been one of the worst situations I've gone through and the feeling of being trapped by a property or the thought of having to file bankruptcy makes me sick. (It's been almost 3-1/2 years since the leak...long time to worry about this) I was more curious if anyone out there has heard of any situations where the DEP has acted on a homeowner's spill, or pursued legal action. Would bio-remediation (bacteria) be a good case for my situation? I did get a price on in-situ chemical remediation (hydrogen peroxide) and it was still very expensive, mostly for the testing, wells, and analysis, not so much for the actual product and installation itself.
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