Home buyer Advice:
Decommissioning Underground Tanks

Soil testing is necessary- even if the homeowner has a valid tank insurance policy.
Buyers in this situation should test the soil surrounding the tank before closing on the property and ultimately decommission the tank. If the buyer waits until after the real estate closing, the buyer may not be protected by the tank insurance policy. Often, tank insurance policies will not cover environmental damage discovered as part of the tank decommissioning process. A soil test performed as part of the real estate inspection period will identify petroleum contamination in the soil without interfering with insurance policy exclusion for "tank decommissioning".

Many tank insurance policies have very high deductibles ($2,500.00 or more). If the homebuyer identifies petroleum contamination before the closing, the homeowner will be responsible for paying the deductible not the unsuspecting homebuyer.

If the soil test determines that the soil is acceptable, the home buyer can use the soil testing report to facilitate the tank closure process after the real estate closing.  This will answer any question as to whether the tank presents an environmental hazard. 

Soil testing & tank testing is necessary when the seller does not have valid tank insurance.
A tank test or soil test performed before the closing date, will evaluate the integrity of the underground tank and identify any petroleum contamination of the soil. If there is a tank test failure or the soil test identifies significant contamination, the homeowner must assume the financial responsibility to correct the condition. Many times, the state will require the homeowner to pay to decommission the tank and take it out of service

Remove or decommission the tank immediately after the real estate closing.
Don't delay! If you intend to take the tank out of service, begin the tank decommissioning process immediately!  Remember, a buried steel tank can start leaking at any time without any warning signs. Soil testing and tank testing can only provide a " snap shot" of the condition of tank and soil at the time of testing.  These evaluations cannot predict the tank's future reliability.  Any delay will increase the risk of an environmental hazard.

If you intend to wait any length of time after the closing, it is important to purchase a tank insurance policy to protect against any future environmental liability

If the home buyer discovered a problem with the tank or soil after the closing date, it is the home buyer's (who is now the homeowner) financial responsibility for the environmental clean-up costs.  Last year, the average cost for an environmental clean-up of a residential oil tank exceeded $8,000.00.

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