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If they had a leaking tank -- and it sounds like they did, given the existence of the remediation report and the NFA letter -- and they had oil tank insurance (such as Proguard) cover the remediation work, they would have been required by the policy to install a new oil tank, and I guess it's possible there was nowhere to put it in the basement and underground was the only option. If the new tank was installed in the last year or two, it will be fine, although you'll want to remove it. The seller may be prevented from doing the conversion to gas by the terms of the Proguard contract for a year after the tank pull. That restriction may not apply to you as a new owner. You'll definitely want guidance from a lawyer, but the fact that there's an NFA letter is a good sign.
The seller accepted my offer today and I have been doing some research on the property records. I found out that in September of 2012 there was a NJDEP remediation report and an NFA issued (2/1/13) after the in-ground tank was replaced. Does this give me the all-clear to move ahead? I'm fine paying for the conversion to gas but just wanted to make sure I did not end up pay for remediation of an old tank. I still want to ask the seller to cover the removal (hopefully they have a policy in place) and might consider covering the deductible as AnthonyB did.
Simple situation. There must be NO UNDERGROUND oil tank on the premises for you to buy the house. Conversion to gas is your problem, you can't make the seller do that. But any underground oil tanks must be lawfully removed and replaced with an above ground oil tank prior to your closing.
NFA doesn't mean it was leaking. A non leaking tank removal will also received a NFA from NJDEPA.
I don't think that's true. I just had my tank pulled a few months ago and didn't get one. The company said all I would get was their report stating that it was a clean pull.
Glad the risk worked out for you. It does not always work that way. In fact I believe even on NJ's EPA website they say less than 40% of oil tanks removed are not leaking when they are removed...obviously meaning that more than half are. They usually test the soil after they remove the tank. I can see why the lawyer tried to prevent their client from doing this because you could walk away only losing your deposit if they found any contamination and the seller would be stuck with the required cleanup. If they found anything then thats where testing, monitoring, and eventual cleanup start. Insurance policies don't cover an unlimited amount regarding contamination and costs of cleanups can easily go six figures.
You misunderstood my post. The risk was on the seller, not me and he hadn't been able to sell the house in several years so it was make or break for him. His lawyer didn't try to prevent him from doing it, he ENCOURAGED IT by telling him that he would never get the house sold otherwise. His plan covered up to $100,000 in clean-up and his homeowners insurance (grandfathered in) covered an additional $10,000 in on site contamination and $100,000 liability. He had far more protection than I would have had.
As it turns out, the tank was only around 10 years old. No issues and we got the all clear.
If they had a leaking tank -- and it sounds like they did, given the existence of the remediation report and the NFA letter -- and they had oil tank insurance (such as Proguard) cover the remediation work, they would have been required by the policy to install a new oil tank, and I guess it's possible there was nowhere to put it in the basement and underground was the only option. If the new tank was installed in the last year or two, it will be fine, although you'll want to remove it. The seller may be prevented from doing the conversion to gas by the terms of the Proguard contract for a year after the tank pull. That restriction may not apply to you as a new owner. You'll definitely want guidance from a lawyer, but the fact that there's an NFA letter is a good sign.
Agree, EXCEPT there is always a better option than putting another tank in the ground. Basement, garage, and above ground (outside) are all options that make sense.
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