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I would strongly advise against the purchase of a home with a buried Underground Storage Tank (UST) even if the tank has been previously abandoned in place. We have removed tanks that were previously sandfill-abandoned with municipal permits and approvals that have leaked years after the fact and caused tens of thousands of dollars in environmental liability. The problem is the companies that performed these abandonments were not required to squeegee the inside of the tank after pumping it out. So the residual oil and sludge left over in the tank eventually leaks out and causes a problem.
Also, most homeowners insurance companies will not even write a policy if there is a tank in the ground. So, in all likelihood, you will not be able to close on the property.
If there is an underground tank that is still being used, now is the ideal time to convert. NJ has a grant program that will reimburse homeowners for this service, so it really is a no-brainer.
Money in escrow may seem like a good solution; however, this becomes difficult when you do not know the extent of the potential liability. You could be looking at $2,500-3,000 to remove and replace the tank with an above ground tank if it is not leaking, you could be looking at a simple environmental remediation where only soil needs to be excavated for under $10,000 or you could be looking at an extensive environmental remediation where groundwater treatment is necessary or environmental bracing of the home is necessary to excavate soils close to the building. It may be the case where the remediation exceeds $100,000 in remediation, sampling and reporting.
At a bare minimum, I would recommend that you remove any UST’s and, if they are leaking, perform a full-contaminant delineation, before closing on the property so at least you have an understating of your potential future costs.
Lusitan-i am the sales manager of an environmental company that works in new jersey and new york and your advice and recomendations were excellent in reference to underground oil tanks.
Cheers. I was schooled by our very own "L.U.S.T. Girl" Wiley; and then I had the practical experience of going through this issue myself. So I just try to spread the word to make sure people are aware of this stuff -- it's not something the average person knows about or thinks of when it comes time to evaluating whether to buy a house or not.
<SNIP>Also, most homeowners insurance companies will not even write a policy if there is a tank in the ground. So, in all likelihood, you will not be able to close on the property.
This is not true.
I recently spoke to several insurance agents & brokers, and they all tell me the same thing; most insurance companie don't care about an abandoned tank on your property. They don't ask about them. This is because the default language in most homeowners policies specifically EXCLUDED liability for abandoned USTs. (Apparently, there are two insurers that will cover them as part of a homeowners policy.)
Now, knowing that, it looks like a good idea to research any tank that might be on the property, so you can know what is there, and to take whatever action you feel is required. Asking the seller to remove the tank & have the soil tested for contamination don't sound like bad ideas to me. Some people will be satisfied if they get certification that the tank was truly emptied & cleaned before it was filled, and that the soil was tested & found to be clean. All of this sounds prudent & careful, and I can't think of a reason to advise agasint it. But the closing will not, in all likelihood, be held up becasue of an abandoned UST.
Last edited by Bill Keegan; 02-05-2009 at 11:08 AM..
Reason: typos
OP..I am an environmental contractor and trust me when I tell you this - DO NOT BUY THIS HOUSE unless they remove the tank and remediate the soil if the tank has leaked! Also, do not allow them to abandon-in-place. This method does not tell you for certain if the tank leaked or not! My recommendation, let the seller remove the old tank and install a new, above ground tank.
It's Relativity rare for oil tanks to leak, some where in the 2% range, but pity the poor fool that has one that leaked and the Environmental Protection Agency finds out about it. They could make you rip up half the yard to remove all the containmented soil. I agree, get this tank removed, even if it never leak or never will leak, you don't need this kind of risk.
I recall one story there someone had there tank removed from the basement and left the pipe to the outside. An oil delivery company mistakenly delivered oil to the house dropped 200 gallons of heating oil into the basement. The damage was so extensive, the house had to be torn down and 45 tons of containmented soild was removed.
Last edited by TechGromit; 02-09-2009 at 03:08 PM..
It's Relativity rare for oil tanks to leak, some where in the 2% range, but pity the poor fool that has one that leaked and the Environmental Protection Agency finds out about it. They could make you rip up half the yard to remove all the containmented soil. I agree, get this tank removed, even if it never leak or never will leak, you don't need this kind of risk.
I recall one story there someone had there tank removed from the basement and left the pipe to the outside. An oil delivery company mistakenly delivered oil to the house dropped 200 gallons of heating oil into the basement. The damage was so extensive, the house had to be torn down and 45 tons of containmented soild was removed.
Rare? We are talking about inderground tanks. You better check the long DEP list with leaked tanks. Mine leaked, hit groundwater, to the tune of $235,000. I was not the only one in my development that had this, there were many more. I could name all the developments in Marlboro and Manalapan with the same problem. This is all over the state of NJ.
Here, you rarely see oil heat. Its either natural gas or electric.
Just clean up the soil? lol, much motr than that was involved. The oil seeped under my crawl, so this involved herical piers, Flushing out ground water. Knocking my entire deck down, rebuilding it.
If a person thinks they can sell without removal of the tank, then they deserve people walking away.
Diane G
I was under the impression(wrong?) that in Nj you could not close on a house with an underground tank still in the ground. Thought it had to be removed to move with the sale..? no?
I was under the impression(wrong?) that in Nj you could not close on a house with an underground tank still in the ground. Thought it had to be removed to move with the sale..? no?
I was under the impression(wrong?) that in Nj you could not close on a house with an underground tank still in the ground. Thought it had to be removed to move with the sale..? no?
Nope. A buyer in NJ is free to be as dumb as he wants, and can buy the house with the oil tank still in the ground. Let's hope by spreading the word that we will save people from this costly mistake!
Nope. A buyer in NJ is free to be as dumb as he wants, and can buy the house with the oil tank still in the ground. Let's hope by spreading the word that we will save people from this costly mistake!
...and keep wiley employed for a few more years .
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