This is one of the most popular questions asked when an oil tank is involved in a real estate transaction. Worst case scenario oil tank leak is a loaded question - it can't be answered with limited information. Limited information is a few soil samples that show contamination.
What is the Worst Case Scenario for an oil tank leak?
- The remedial cost exceeds the value of the property.
- The dwelling must be torn down to remediate the contamination.
- Contamination extends under the street and you are responsible for it. Conversely, the contamination goes onto the neighbor’s property and you are responsible for it.
These are all residential, heating oil tank leaks. Commercial tanks with commercial problems - well worst case starts at $500,000 and goes up from there and usually takes years to solve, it’s a slow bleed.
What costs could these worst-case residential oil tank leaks involve? Every residential oil tank leak is different and these costs can approach up to a million dollars. Curren Environmental is currently working on a site that is budgeted at $540,000 for remediation and we have to let them know that’s not the worst case that we have seen.
Curren had a site listed for $1,100,000.00 and spent $475,000 to begin the cleanup. The site never got clean, has contamination permits in place, and sold for $975,000. That’s not the worst case, but a sad story because the owner ended up losing money on the sale of the property.
We were involved with a site where the house had to be torn down and the owner is having a problem with zoning to rebuild the house because the house footprint does not conform to the lot size and since the foundation is gone, you must comply with current zoning setback and impermeable ground cover. That’s kind of a worst case, you can’t rebuild to the same footprint.
The common denominator is when someone asks "What is the Worst Case scenario of an Oil Tank Leak", there is no truthful answer due to the lack of information that would allow a professional to assess and provide a realistic opinion.
Doctors call it a diagnosis, which is provided after testing and evaluation. Environmental consultants call it a delineation where we test and assess and evaluate options to remediate. We define the vertical and horizontal extent of contamination, what media is contaminated is it just soil, or is groundwater impacted as well? If you don’t know how big or small the problem you can’t guess the worst case, some sites only cost $75,000.