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When buying a house you inherit the improvements, the land, and the fixtures. An oil tank would be classified as a fixture as it is connected to the house as a fuel source. Generally speaking, an oil tank would be thought of as something typically transferred during the sale.  The tanks in the photo below are newer, about 13 years old, and are in an 80-year-old house, the layperson's opinion would be great new oil tanks, right? Well, the older, wiser bull would ask -  what happened with the prior oil tank?

The answer would be the prior oil tank is in the ground or rather underground, and the in-use underground oil tank was replaced because the water was entering the oil tank the oil tank was not removed because it cost money and the new oil tanks were an unexpected expense. Trust us the buyer is going to want the buried tank removed.

To finish the story above, one of the oil tanks did leak, about $14,000 to clean up, so not that bad.

Oil tanks are a great exception when it comes to real estate.   Oil tanks are a known liability, a Recognized Environmental Condition (REC), or an Area of Concern (AOC). Oil tanks age and wear and when the failure occurs,  oil leaks, which causes soil contamination, which under current laws is the responsibility of the owner to repair and remediate.  Now, buyers are known to sue sellers after the sale occurs if they discover the oil tank leaked and buyers believe owners did not disclose this key defect. 

Can you sell a house with an oil tank that is in use or decommissioned or abandoned?  

Sellers can indeed legally sell the home, but in the rare times this does occur there is liability generated for both buyer and seller.   To buy a property with a tank is to assume the liability associated with the tank, which some buyers assume is no liability.

Why would a seller want to sell a property with an oil tank?

First to remove and replace an oil tank, budget $2,000 for removal and $3,000 or more to install a new oil tank. Converting to natural gas, budget $10,000. The first reason to sell with an oil tank is seller saves money and why would a seller want to upgrade a house they are selling? But that isn’t even the real reason sellers sell with an oil tank, it's because the remediation of an oil tank can cost $30,000 or more, or less, but the cost to remediate is more than most people can budget, so it’s an expense people avoid.

 So who has liability when selling a house with an oil tank?

Both buyer and seller have liability. For a seller, when the transfer occurs, no doubt the buyer is not anticipating a $50,000 cleanup and when that occurs, lawsuits occur as the buyer suspects the seller knew about the oil tank and lied. Sellers who sell tanks are viewed as used car salespeople. We have seen every sort of lawsuit from Estates to retired people to young couples selling to buy a larger home, in every scenario the buyer finds contamination that they believe the seller knew about. In most cases the buyer wins and the seller pays.

How does a buyer have liability for buying a property with an oil tank?

Buyer beware, break it you buy it, possession is 9/10^th of the law. Whatever the term, if you own the property, you own the problem. Sure, you can sue the seller as in our example above, but if it is say an Estate and the estate dissolves and the money is gone, good luck.

What if you have an abandoned oil tank and disclose it to the buyer?

Buyers buy homes where the seller discloses they had an oil tank filled in place tank, after they buy the property they realize that an abandoned oil tank doesn’t mean no leaks. The saying goes as long as it was abandoned properly, that oil tank does not present any legal issues. The real question isn’t whether a seller can do it, it’s whether a seller should or to put it in simple terms are you 100% the abandoned oil tank does not represent an issue?

Case in point, property being sold, owners did not disclose an oil tank.  The buyer does an oil tank weep and finds an oil tank.  Sellers dig up information on the oil tank, even though two days earlier they did not know the underground oil tank.   Curren Environmental is requested to review the paperwork.  It included an invoice, a copy of the permit (to fill the oil tank in place), a copy of the oil manifest, a hand-drawn map of the property and a one-page letter which I snipped below. 

Makes No Warranty or Certifications to Soil, Groundwater, or Environmental Conditions.

So did the tank leak?  I don't know, but the company that did the work is not saying it did or didn't. per the statement above. 

The next step is to the oil tank gets removed and tested, because the paperwork is insufficient in today's environment, but to be fair this wasn't sufficient in 2005 either, but the people who owned the house did not want to find a problem so they hired a company who would not test the soils.  Of course, flashforward to today and they are paying again to get the tank decommissioned so they can sell the property.

What do you have that says the oil tank did not leak? 9 times out of 10 it’s the wrong document, like my example above. A thousand other set of documents that is insufficient to certify the oil tank as nonleaking. 

Buyers and sellers need to be on the same page with oil tanks.

Did you look for contamination when the oil tank was abandoned?   Like when a dentist looks for cavities, when you abandon an oil tank there are steps you take to certify the tank did not leak, and also testing, like an x-ray.

What if you remove the oil tank instead of filling it in place? Would we find contamination?  

We often find contamination when removing abandoned oil tanks. Yes, you read that right, we find some evidence of contamination, of past soil contamination (maybe a previous tank buried in the same area as an abandoned oil tank, sometimes we find a 2^nd oil tank. In all these situations we find contamination that wasn’t picked up before, and now it's reportable to the state, and the owner has to clean it up. How do you know if you have proper documentation certifying a tank did not leak?

Every year we peer review thousands of reports, lab data, and documents about prior environmental work, to see if our clients are covered. Often the data is lacking or there is an issue that people gloss over.  In most all cases, we have to recommend the removal of the tank, which is reverse engineering the prior work.

Is it better to remove or abandon an oil tank?

Removal is always better because the tank is gone, there should be no issue if it leaked because you can see the tank out of the ground and it’s easy to collect soil samples from the ground after the tank is removed.

Tanks destroy curb appeal so if selling a house with an oil tank, no one is going to say hey that’s a benefit. The number of buyers is smaller than a property without an oil tank. A house that has an abandoned underground oil tank will stop most buyers in their tracks because the buyer doesn’t want to inherit some problem in the future.

We have had plenty of clients (who eventually hire us to remove the oil tank) selling with a properly abandoned oil tank, properly abandoned in the ground. All permits were obtained, but the deal repeatedly falls apart. Why?  Because the buyer goes into attorney review, and they talk to their attorney and decide they won’t proceed out of attorney review unless the seller agrees to remove and test the oil tank.

Now many developers and house flippers will buy a house with an oil tank, but you hope they disclose the tank to the next buyer, otherwise, lawsuits occur, and the original seller whom the flipper bought the house from gets sued. Why sue?   Because an oil tank is found and the buyer demands removal, then contamination is found and you, as the original seller, obviously knew about the contamination.

Let’s say you even find someone who wants to buy the house with the oil tank, well the mortgage company may have a thing or two to say. Most lenders are hesitant to make a loan on a property that has an abandoned underground oil tank, even if you have permits. Sometimes for certain loans, the oil tank makes the lender pull the load or the lender wants the tank removed to provide a mortgage.

These are some of the reasons why an oil tank should be properly removed and documented.   yo less likely to get sued and more interested buyers translate to a higher purchase price and of course less headaches.

The saying we get better with age, well that relates to a foundation of knowledge based on years of experience.   At Curren Environmental those that know teach, those that know, know from decades of experience thousands of sites.   We do peer reviews of the work of other environmental companies every day, thousands of reviews a year.  These reviews are both paper reviews (in office) as well as on site over seeing work for clients protection.  Needless to say we see the good and the bad.  The bad is also not always the cheapest price.  Bad projects have a common thread of promising things that they cannot deliver on or to be put frankly telling the client what they want to hear, even though this may be the opposite of what other firms are saying.  Key topics, don't worry about a leak, we can manage the leak if one is found, lastly we can remediate for a lump sum and we do not need any testing data (these firms have x-ray vision.

Recently I had to oversee the removal of a residential oil tank.  The tank was actually found via a GPR tank sweep by Curren. The  owner had no knowledge that a UST was present Tank Sweeps with GPR.    Owner got a really inexpensive cost to remove, so client (buyer) wanted the removal to be overseen.   Now I am not saying cheap isn’t good, everyone wants a bargain, you don't want to pay full price, but you also get what you pay for.  Cheapest is rarely best, its the cheapest.

The photo below shows one of the onsite projects reviewed. I knew that the person wearing gym shorts at 9 am  and no shirt  meant the day was going to be interesting.  Let’s start by saying, gym shorts and a tank top are not proper work attire.  It’s was a hot day so the gym short person took the tank top off, at was maybe 9:10 am.  Things didn’t get better from there.

Yes that is a person inside the tank with no PPE (personnel protective equipment, respirator etc.), completely not according to regulations.  

Although the company had lettered vehicles they spelled remediation wrong.  If you say your do something  you should be able to spell it.  

So the tank gets excavated just enough to clean it.  Took them 2 hours to remove the tank after cleaning, because the tank was 80% buried. They couldn't see the logic in uncovering the tank to the 50% mark so the earth wouldn't hold it in place.  Over the course of two hours, they damage the driveway, killed mature shrubs and after removal hit a sewer line that would have been avoided had they had gone into the basement to evaluate for utilities.  Inspecting a basement to see where underwound utilities enter is excavation 101, utilities are not marked accurately 100% of the time, property owners may not know on where what utility is located and lastly not all utilities get marked.  In any event the damage could have been avoided.

Now the good part, tank is removed and it requires two inspections.  No one knew of or when that would occur.  To be brief they had no inspection, took no soil samples (sampling is the only way you can 100% verify the tank did not leak) and backfilled the hole.

How do you avoid tank removal mistakes?

To be clear removing a tank is not building the international space station, but there are a slew of regulations and protocols you must follow API, OSHA, NIOSH.  You can check reviews on line for sure, but here are some tips that can find out the good from the bad.

1. Was the person you spoke with more car salesperson than environmental consultant?  You don't want to be sold into making a decision.
2. Did the company walk you though the steps they will follow?  This is an easy one and even the bad companies do it.  
3. Did they  put their steps in writing?  Again easy.  There should be a report stated in writing you will receive after removal, its super important.
4. Did they discuss the possibility of a leak?   What about if levels of oil are above standard?   What are the standards?  What amount of oil is permissible?  Look every tank could leak so you need to know the dark side of a tank removal that leaks, this needs to be discussed and put in writing.
5. Is their email a Gmail or yahoo email.  It might not sound like much but if a company doesn't have a hosted web site with hosted email with their domain, well you maybe buying into a Chuck in a truck.

It's tough to compare environmental services to other industries, but our office get a large share of property owners gripping about how the hired the wrong company.  To be fair most people will never have to remove two tanks in their lifetime or complete two mold projects, so you are doing something once and likely won't do a good job at it.

Want expert advice and deal with professionals?

What you should know about removing an oil tank.

Since the northeast part of the United States was part of the original Thirteen American Colonies  we have a longer history of oil heat than other parts of the country.  You can find oil heat in homes that were built before the mid 1980's going to 1900.  If you have a house circa 1800's or the early 1900's there is almost 100% certainty that oil heat was utilized at some point. Heating oil was stored in either aboveground storage tanks (ASTs) or underground storage tanks (USTs) for heating homes, and other commercial applications. Nearly 100% of oil tanks were constructed with steel, fiberglass wasn't even considered for commercial use until the 1970's and even then commercial use was limited and residential was near nonexistent. Rust never sleeps and all steel will corrode over time, buried tanks will corrode faster than aboveground tanks, thinner tanks faster than thicker tanks. The reduction of sulfur from heating oil to help with clean air actually increases biological activity in a tank and this bacteria can crease corrosive byproducts which can actually corrode a tank from the inside. 

It has been estimated that almost 100% of the buried oil tanks have exceeded their reasonable life span and should be replaced.  (The average warranty on a new tank is 20 years, a great roof has 40 year shingles, so you do the math). How long does an oil tank last?  The number for ASTs nearing retirement is closer to 50% as many of the AST are newer, having replaced older USTs.  Oil tanks are rarely ever replaced and almost never with another UST.  If a UST was replaced with an AST it was probably because there were issues with the UST taking on water or losing product.  To put tank age in perspective:

Home Built in 1980 = 39 year old tank

Home Built in 1970 = 49 year old tank

Home Built in 1960 = 59 year old tank

Home Built in 1950 = 69 year old tank

Compare tank life span to common wear and tear items:

Roof shingles last 20 to 40 years

Hot water heater 20 years on average

What you should know about removing an oil tank is that there is a possibility that the tank leaked and any buyer of the property  will want testing performed at time of removal to document that the tank didn't leak.  In short, do not buy a property that had an underground oil tank removed without a report documenting the removal and associated soil testing.

Common questions we get asked about buying a home with an oil tank:

Would I buy a house that:

Had oil tank removed with no soil testing or report, no.

Tank removed, owner has a page of lab day, no report, no.

Tank was filled in place with sand, no soil testing, no.

House has an in use underground oil tank, no 

If you want to know why no was the answer to each question, call our office and speak to a professional  856-858-9509.

For a property owner removing an oil tank, when they speak to firms concerning oil tank removal the possibilities of a leak and necessary soil testing should be discussed and put in writing as leaking tanks can spiral projects costs into the tens of thousands of dollars.  I say this as we get calls from people who had a tank removed and they feel a bait and switch occurred.  They never discussed the tank leaking, hired the cheapest company and after removal the company pointed out the smallest hole in the tank to owner and construction inspector to ensure they tank fails inspection.  What followed next was a $10,000.00 estimate for remediation, that's when our office gets called.

What you should know about removing an oil tank is it is a very complicated process, in particular in New Jersey.  In August of 2018 NJDEP revised regulations requiring 5 soil samples to be obtained from an oil tank that is removed and evidence of a leak is noted.  NJDEP Oil Tank Regulations August 2019  Our office has yet to see any tank removal proposal since August that references these new regulations and the required soil testing.  I know this as we get THE CALL from unhappy tank removal clients and the contracts they signed for tank removal are vague and ignore the steps you have to take if the tank leaks.

Why do NJDEP regulations require you to take five soil samples when a tank leaks?  The soil samples are meant to thoroughly evaluate the tank excavation for oil levels. You see rather than assume the tank leak requires remediation, the NJDEP wants you to test each sidewall and the bottom of the excavation, this allows you to make an informed decision as there are a couple possible outcomes from an oil tank leak, here are a few:

1. Oil tank leaks you acquire the five post removal soil samples all samples have oil but nothing above permissible limits.  No remediation, financial disaster avoided, although you do have to pay for the testing, NJDEP report and the $400.00 review fee.
2. Of the five soil samples acquired one is above permissible limits.  This is good and bad news.  Bad news you have to remediate, good news you know WHERE you have to remediate.
3. Tank leaks and you take no soil samples.  You assume all good as you have no testing data saying you exceed; tank firm assumes all bad and remediation required since they have no testing data saying all good.  The rub here is you the tank removal client is not supposed to know all the ins and outs of the regulations, which were not discussed with you prior o removal.  Even if your oil tank has a 1% of leaking, is it not important the scenario of  a tank leak be explained in writing to you?  If the answer is no, don't read any further.

Curren Environmental has been performing tank removal for over 20 years, in New Jersey, Pennsylvania and Delaware.  Our office will take the time to discuss your project answering all you questions and discussing the good and the bad.  A common statement we tell clients is we tell you what you don't want to hear, meaning we discuss the downsides meaning the leaking tank situations so you are at the least aware of the possibilities. When you receive a written scope of work from Curren what was discussed is in writing including soil sampling cost and NJDEP reporting if required. If you want a professional opinion, a professional tank removal and most important a professional report documenting the tank removal, call our office.