Leaking oil tank removed, with pending clearance from NJDEP (foundation, installed, cost)

[vvfong]

My husband and I were in contract for a property with an underground oil tank. It was found to be leaking, hence removed and replaced with an above ground tank. From soil replacement to getting the No Further Action letter from NJDEP is very time consuming. We are currently in Phase 3 of clean up where a bedrock monitoring well will be installed, see if the leakage has impacted groundwater. Seller's insurance company will cover for any future cost if ground water is contaminated and it is transferable to new owner upon closing. Are we good to close this deal? Are we putting ourselves in unforeseen risks?

We like the house and intend to close, but our lender is hesitating as he said NO BANKS would proceed without clearance from NJDEP. I was told it is not uncommon to close with pending environmental issues.

Please advice and shed some lights. Thank you.

[njbeachgirl11]

Originally Posted by vvfong

My husband and I were in contract for a property with an underground oil tank. It was found to be leaking, hence removed and replaced with an above ground tank. From soil replacement to getting the No Further Action letter from NJDEP is very time consuming. We are currently in Phase 3 of clean up where a bedrock monitoring well will be installed, see if the leakage has impacted groundwater. Seller's insurance company will cover for any future cost if ground water is contaminated and it is transferable to new owner upon closing. Are we good to close this deal? Are we putting ourselves in unforeseen risks?

We like the house and intend to close, but our lender is hesitating as he said NO BANKS would proceed without clearance from NJDEP. I was told it is not uncommon to close with pending environmental issues.

Please advice and shed some lights. Thank you.

what happened on the property? Just found out the property I'm buying has ground water contaimantion. Seller says - not costly.

[BobKovacs]

Originally Posted by njbeachgirl11

what happened on the property? Just found out the property I'm buying has ground water contaimantion. Seller says - not costly.

If the seller says it's not costly, tell them to fix the problem before you buy. IMO, you'd be out of your mind to buy a property with that sort of issue, especially in today's market with so many properties available.

[golfgal]

Originally Posted by njbeachgirl11

what happened on the property? Just found out the property I'm buying has ground water contaimantion. Seller says - not costly.

One house we considered buying had an fuel oil tank in the basement (heat) that had ruptured and leaked. The house was abandoned and needed a lot of work (which was fine until we saw the oil leak). I talked with the mortgage company and getting a loan was going to be difficult to start with because of the potential clean up issues, then the Superfund clean up process was very involved and if you missed dotting an I, you were out of luck. For this house it was estimated that it was going to run about $50,000+ to remove the tank, shore up the house, dig out the soil under the house, replace the foundation of the house because the oil had permeated the foundation and would just continue to leach into the soil. We decided to pass on that house...it was a fantastic house though. I still love that house.