Buying or Selling a Home With an Underground Oil Tank

At Curren Environmental we have over 25 years' experience with tanks. Curren is a trusted source in both large and small tank removals, tank testing, and tank remediation. We provide tank services to both residential and commercial clients and being a full-service firm, we can perform tank testing, tank closure in place (tank abandonment), tank removal, and remediation when needed.  

Tanks get a bad rap for sure, but there is a lot of confusion regarding oil tanks, this page will help clear up some misconceptions and prudent courses of action regarding tanks.

A common situation in a real estate transaction is you find a house you want to live in, but it has an underground oil tank.   The big problem for a buyer and the seller is afraid of the liability and doesn't want to remove the tank, because if the tank leaks, tens of thousands of dollars could be spent to clean up a leak.

How Do You  Know if an Underground Oil Tank Is Leaking?

You can test the soil around the tank if the tank is newer and has a warranty, or you can remove the tank and take samples and either install a new tank (Aboveground typically) or convert to another fuel source.

Why Should You Remove an Underground Oil Tank?

Removing an old tank removes a liability on a property as Rust Never Sleeps and every oil tank must fail when a tank fails, oil leaks and you have to clean up the contamination. The law places the burden of cleanup on the PROPERTY OWNER.

Can I sell a home with an underground oil tank?

There is currently no Federal or State regulation prohibiting anyone from selling or buying a home with an underground oil tank in NJ, DE, or PA.  Now a local municipality may have an ordinance saying you have to, but we have yet to see a local law anywhere in the tri-state area. 

Selling a home with an oil tank is hard.  The reality is homes with underground oil tanks do not sell as quickly as those with above-ground tanks or other fuel sources.

In a real estate transaction the attorney, a realtor, an insurance agent, and a mortgage company may all bring up the liability of oil tanks.  

Why care about buying a house with an oil tank? 

You are buying an unknown liability.   Maybe you buy the house and remove the tank which would on average cost around $2,000.00.  But if the tank leaks, maybe you spend $55,000 to clean it up.   That's the kind of liability we are talking about.

What percentage of oil tanks you are leakers?

For a variety of technical reasons, you can't answer that question, as there were many different manufacturers of tanks and soil conditions vary that can both prolong a tank life span and shorten it.  It is fair to say, most tanks don't leak, but some do, the ones that leak many do not require remediation, and the others that do are your biggest concern.   Can you afford a $10,000 cleanup?  Ask yourself or a buyer that question. 

How about a property that has an underground tank foam-filled? There are local permits, an inspection ticket, and approval from the town. The buyer is asking them to remove the tank if they want to sell it to them. Does the tank have to be removed?

It is within the regulations to abandon an underground tank in place, but it is also undesirable to purchase a house with that tank in the ground that has no documentation that the tank did not leak, and by documentation we mean soil testing.   So if someone filled a tank with foam, sand or stone and never tested the soil to certify the tank did not leak, well the real solution would be to remove the tank and obtain soil samples.   That is the only way to have 100% confidence.   

I have a client who has an underground tank, and needs to sell but cannot afford the removal cost – is there some program available? And what if the tank is a leaker?

We have seen people take equity loans out of the home to pay the cost of removal, some people tap relatives and some real estate agents.  Unfortunately, there is no program that will deliver to remove a tank.  

What can we do if the seller refuses to remove the underground tank and my clients want to buy the house?

The seller is refusing to remove the tank for a reason, what is it?   An equitable approach would be to have the buyer offer monies (at closing) to contribute to the tank removal, so both parties have skin in the game.   If the tank leaks, the seller must address it, if they do not buyer can walk away and still has the tank money as the home never went to closing.

How much does a leaking tank cost to clean up?

Budget $20,000 for a small tank leak.

Are tank sweeps prudent when house a house?

If you can't provide written evidence the home never had oil eaten, than a tank sweep with GPR is 100% necessary. 

Oil Tank Sweeps

The Northeast United States has the longest history and one of the highest usage histories of oil heat in the United States.   Pennsylvania New Jersey & Delaware has used oil since 1900.  Natural gas really was not popular until the 1970s when the oil embargo of the 1970s saw oil prices increase (as well as supply) and the deregulation and lower price of natural gas.   

Removing an oil tank is considered or should be considered a replacement of an expendable item. Much like a roof can wear out, so can a tank.  A good rule to follow is if a roof was replaced so should the tank.

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What is the process to get a No Further Action Letter?

When a tank leaks, it must be reported to the appropriate state agency PADEP, NJDEP & DNREC.  Reporting the leaks, now makes you the owner responsible to follow applicable requirements to address the leak.  Addressing a tank leak could mean just soil sampling to prove that while oil is in the ground it is within permissible limits.

The nuclear approach is remediation which 99% of the time is removing soil.    The report generated from either approach goes to an environmental agency for review and approval or an NFA.  Time frames for government review could be weeks or months.

Since the 1990's Curren has completed tank-related work in Pennsylvania, both commercial and residential.  We have a proven track record where we have shown our clients that remediation is not always necessary, even when a tank is found to be leaking.