What Happens After an Oil Tank Sweep?
Oil Tank Scans are part of any buyer's due diligence process. Undisclosed abandoned underground oil tanks (USTs) are a financial liability that can loom over a site. A buyer does a tank sweep so they do not buy a property with an oil tank, that could leak or has leaked and would burden the buyer with an expensive clean up, think $50,000.00
What to expect from a Tank sweep.
A tank sweep, tank scan, or geophysical survey is meant to evaluate a property for historic heating oil and to locate intact USTS.
The best tank sweeps will be performed by a company like Curren Environmental who is also licensed to remove tank. I say this because you get better locating tanks after you have removed tanks. There is no standard installation for a buried UST, because they were installed by very independent people who sold coal then sold heating oil so there was no rhyme or reason as to where a tank was buried. You would think install a tank in the front yard so it’s closer to the street where the fuel oil truck does not have to pull a hose very far, yet we find tanks behind the house as well. Tanks can be buried under grass, a concrete driveway, the sidewalk on the property line, sometimes the oil tank is partially on the neighbor’s property.
What Happens After an Oil Tank Sweep finds an oil tank?
If you find a tank you want to have the owner remove the tank, you do not want to walk away from the sale until it is determined what the seller is going to do with the tank. Remember the seller should notify any buyer that a tank is present, you are doing a tank sweep to look for a tank, so all things being equal when you find a tank it should be expected to be a surprise to the seller.
Pro Tip
If the seller disclosed or did not disclose a buried oil tank, they now have documentation that a tank is present, so do their realtor, and your realtor and any attorneys involved. If you the buyer walk away, the owner must disclose this tank to any future problem, in short, the problem does not go away.
If you hire a company to perform a tank sweep, you want that company to be licensed to remove oil tanks. If you remove tanks, you are better skilled in finding tanks, but more important the company can provide costs to remove the found tank. Follow the logic, you find a tank, you get a report of the work and a separate cost to remove the tank. The seller now has hard data that a tank is present and a cost to address the issue. That is how Curren operates, we want to fully cover our clients. Better than 70% of the time when we find a tank, the owner hires Curren to remove the tank because we are cost-competitive and competent, They also know that the buyer is comfortable with Curren. Although in practice it does not 100% have to be Curren to remove the tank, you simply want the tank tested with soil sampling to prove it did not leak.
Why remove a tank found during a tank sweep?
For some reason the oil tank is still in the ground, maybe it started leaking and the owner stopped using it? The fact is you have no 100% certain answer as to why the tank is still in the ground. Environmental regulations place the responsibility of oil leak cleanup on the property owner, not the last person to use the tank. So you buy a house with an oil tank that had previously leaked you are responsible for cleanup, can you say $50,000 in cleanup cost?
Why not test a found oil tank?
First, you have no idea what is inside the found oil tank, might have 100 gallons in the oil tank, testing doesn’t solve the problem of this 100 gallons leaking in the future. Second when an oil tank leaks the contamination is found UNDER the tank, as gravity pulls oil down and many oil tanks rust along the bottom of the oil tank. Tank testing by doing soil borings around the tank can’t magically test the soil below the tank. You can miss contamination below the tank. Third, when you do borings around the oil tank you must outline the oil tank so your borings are tested as close to the tank as possible, but you can’t test between the house and the tank as that is where the oil lines are, which likely contain oi that you can hit unknowingly and now you created a leak that has to be cleaned up. Lastly, you don’t test a found oi ltank, because pass or fail the test, the final advice from the test will be to remove the oil tank, because again any oil in the tank could leak next week.
Who pays to remove a found oil tank?
The property owner is responsible for the cleanup of the oil tank you found that they did not know about.
What if the owner/seller refuses to remove the oil tank?
A couple of things will occur when an owner refuses to remove a found oil tank. First, they need to now disclose the tank, which is a major defect to any prospective purchaser of the property. Their realtor must also do this. The owner will realize that any sale that falls out of contract is a blemish on the property and if they do not disclose the found tank all a new buyer has to do is get in touch with you or your realtor. Finding a oil tank is a matter of public record.
If you find a buried oil tank, can you test the oil tank at the same time?
Super common question regarding testing a oi ltank after you find it, the short answer is no. Drilling or digging in the ground requires a utility markout to be legal and helps prevent you from hitting public utilities. Markouts take 3 to 4 days to complete and when they are ordered you have to provide owner information as well as permission from them to do it as the utilities will come on the property and leave flags and spray paint to mark underground utilities. So to safely and legally drill you need a mark out, but you also need a drilling unit. Oil Tank locating uses radar, drilling is a completely different piece of equipment that is housed on a trailer and towed to a property. Bottom line you will not have equipment with you to test soils.
Can I buy a property with an oil tank found by a tank Sweep? Can I have sellers set aside money to pay for the tank removal and remediation?
You can do whatever you want as long as the mortgage company will do the loan and the insurance company will provide coverage. Any money set aside to cover the cost of oil tank removal and remediation would have to be a cost based on testing completed that determined that there is an oil tank leak and how large or small the leak is. Small is typically under $15,000, large over $100,000 and we have seen remediations cost $245,000, $400,00, and over half a million.
If you were to ask if it is smart to buy a property with a buried oil tank that was found during a tank sweep, the answer would be no, there are way too many unknowns. The unknowns are if the oil tank leaked and if so, how extensively, you could spend $4,000 to $10,000 just to define the problem and get the cost to remediate. The seller who generously offers to put $8000 or $20,000 in an escrow account to cover the tank could be severely underfunding the project.
The oil tank on the left was under an addition, cleanup was around $85,000, not including the cost of foundation replacement. Would you want to have the seller give you an $85,000 credit to allow you to buy the house and then have to manage the remediation?
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