Home Buyer Advice when you are buying a home with an oil tank

Oil tanks can interfere with buying and selling a home, it’s all over the internet. Your realtor and attorney should be well aware of the issues with oil tanks and in turn you need to know what you are up against when you find your dream home and it has an oil tank.

Remember Buyer Beware

The most common advice you will hear regarding a home with an oil tank, is to test the tank before buying to make sure the tank is not leaking.

Why test an old tank, when you know that it needs to be replaced?

You have to consider the age of the tank. New tanks bought today can have a 20 year warranty, older tanks either had no warranty or a warranty that is well past any reasonable time frame, think about a car with 200,000 miles? Would you buy it and expect it to last?

This tank was in use with no problem.  No oil loss said the owner.

See all the oil in the tank, no way its leaking.

See all the holes in the bottom of the tank? (center of photo)

These photos represent the optimistic seller, wanting to downplay the oil tank as being an issue.  Only after the buyer offered to pay for the tank removal did the seller agree to remove it and find that the tank leaked and yes remediation is required and the transaction the goes into limbo.

What about testing a tank before you buy a house?

Tank testing can be money well spent, but if the tank is old and 99% of tanks are old, then it should be replaced. Money spent for tank testing is better allocated to removing the tank and either converting to another fuel source (natural gas, propane, geothermal) or a new Aboveground Oil Tank (AST) that has a good warranty. If you are reading this and selling your home, start planning to remove the oil tank. If you are buying a home and there is an underground oil tank, go find another house.

Why are oil tanks a concern?

Because tanks corrode (they are buried) and leak oil into the soil and groundwater requiring the owner to clean it up.

What does it cost to cleanup a tank leak?

• Small leaks can be completed for less than $10,000.00

This is a $10,00.00 cleanup

Some cleanups that can take 3 to 4 months and can cost $20,000 to $40,000

This was just above $40,000.00

Average cleanup costs involving both soil and groundwater: $90,000.
On the high end, the NJDEP has stated that costs have exceeded $300,000.

This was actually over $300,000.00

Let’s be clear the money spent for an oil tank cleanup could be spent on remodeling the house or even adding an addition.  You have to consider the remediation cost before buying a home with an oil tank.

What to do about a buried oil tank?

Removal of any old buried tank is always the best approach when the tank is old and most all tanks are old and have outlived a reasonable life span.  An underground oil tank is not a selling feature, trust me no one wants to buy your old tank.

What if the house your buying had a tank removed?

That may be good or bad, contingent on if the tank leaked.  When we document a tank removal or a tank closure in place 100% of the time we take soil samples, 100% of the time we provide a lengthy (boring, but detailed) report that documents how & what we did in regards to the project.  It details how we tested and the interpretation of the results. 100% of the time we put it in writing if the tank did or did not leak and if it leaked, what the next steps are to address the leak. If you don’t have this information, you don’t have what it takes to ensure the tank is not an issue.

People give us all sorts of paperwork relating to a removed tank or closed in place tank such as town permits, invoice for work, proposal for work, sticker from township inspector. These documents can prove the tank was closed properly. Doesn’t say the tank didn’t leak. Does your dentist look at your teeth and say no cavities? Or do they take x-rays? They take an x-ray to be 100%, you take soil samples to ensure your tank didn’t leak.

This remediation?  Well the tank was removed, it didn't leak, until we tested the area and found contamination.   $45,000.00 later all was cleaned up.

Sometimes the seller isn’t sure if there is a tank on the property. In this case, it’s recommended to have an oil tank scan performed to check for undisclosed tanks. Always, always have the tank scan or tank sweep performed with a firm that does GPR. Metal detectors that people use to look for a tank are inaccurate, inexpensive and unreliable. No commercial property would scan with a metal detector.

Oil Tank Sweeps with GPR

What is the single most important thing that will protect me from issues related to my underground oil tank?

I am asked this question often and the answer is always the same. Remove and test the soil at the tank area to ensure the tank didn’t leak.

Want expert advice?  Call Curren.