The Single Family Home Buyer: Underground Oil Tanks

Residential Real Estate Attorney Guide Buying Real Estate

Whether buying a second home in the country, or giving up the apartment life for a home in the suburbs, buying single family homes presents different issues that require careful attention. No longer able to rely on managing agents to handle the day to day operation of our apartments, the single family homeowner must carefully review their prospective property before buying, to ensure there are no hidden and costly surprises that lie in wait.

A buried and leaking underground oil tank is one such surprise that brings a hefty cleanup bill along with it. Homeowners are responsible for leaking oil tanks on their property, and cleanup costs generally start at $20,000 and can grow much larger if there is an active groundwater contamination. Moreover, these costs are typically not covered by most homeowner’s insurance policies, which have “pollution exclusions” that carve out liability for these cleanups. So before buying, be sure to search for evidence of an underground oil tank before you sign on the dotted line.

Here are some suggestions:

Step 1: Ask The Seller. Start by asking your seller if they ever replaced the oil tank on the premises. Even if the current fuel source is natural gas, or there is an above-ground tank in the basement, this question sometimes yields answers like “yes, we have an oil tank for pool heater,” and never replaced it when we switched to gas. Sellers may not realize that their under-ground tank may be an issue, and often will simply tell you what they know which will help in the investigation. If the seller discloses an abandoned tank, ask for documentation to confirm that it was properly abandoned in compliance with local codes.

Step 2: Ask Your Inspector. Hiring a qualified home inspector or engineer is an important part of the buying process. Discuss with the professional what, if anything, they will do to search for buried oil tanks on the premises. The inspector may offer, at an added cost, a magnetic scan or ground scanning radar to locate a buried tank. The extra cost may be well worth the piece of mind.

Step 3: Look For Outdoor Clues. Buried oil tanks often have with them bald patches of grass where the spilled oil from fill-ups have contaminated the soil and prevented grass from growing. If there is no snow on the ground to cover these patches, walk the property, particularly the area near the house and indoor furnace, to look for evidence of dead patches of grass. This can be a sign that a buried oil tank resides below. In some areas, the oil fill pipe is at curbside, even if this is a long distance from the underground tank. Walk the curb line of your property to search for the presence of oil fill pipes.

Step 4: Look For Indoor Clues. Find the furnace servicing the home and look to see if there are any lines exiting the basement wall, or coming out of the basement floor.

Step 5: Call The Oil Company Servicing The Property. If there is an above-ground oil tank servicing the heating system, call the oil company that the selling homeowner uses and ask them to check their records for the installation of the tank. Even if the seller did not do the new tank installation, the oil company records may shed some light on who did, and whether there was a proper abandonment of the old, buried underground tank.

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