Straight Talk About Abandoned In-Ground Oil Tanks
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Straight Talk About Abandoned In-Ground Oil Tanks authorStraight Talk About Abandoned In-Ground Oil Tanks
by Gerald Warren of G. Warren Inc.
06-16-2004

One of the frequently asked questions of a new home buyer is, "How do I know if there is an abandoned oil tank on the premises? íí.

As an experienced home inspector, a licensed real estate appraiser and a real estate investor, I give the following advice; (A) to really be sure that there isnít any in-ground oil tank, one must hire a professional with a special metal detector to search the property, this search costs about $250.00. But before spending any money on such a search, I suggest that the buyer first have a complete home and termite inspection. If the house is not acceptable and the purchase is terminated, the buyer could save the $250.00 tank search. (B) Before starting the home inspection, ask the inspector to examine the grounds close to the house for any signs of an in-ground tank. Even though an in-ground tank is outside the scope of the home inspection, if the inspector sees signs of an in-ground tank, a courtesy report can be entered into the report and save the buyer the $250.00 search fee. Many times there are tell tale signs of an in-ground oil tank such as: visible vent and/ or filler pipes sticking up through the ground from the tank. Also, in the basement there may be disconnected oil lines coming through the foundation wall that were the feed lines from a one time in-ground oil tank. Another sign is a concrete Channel that has been cut into the basement floor that leads to the furnace area. All oil lines running to a furnace must be covered with concrete for safety reasons. Most times when the lines are removed and the channel filled, a different colored fill concrete is a sure sign of a one time oil tank. Any of these signs is a good indication of a tank that has been removed or, there is still a tank in the ground. An almost sure sign that there is a tank is when a filler pipe is found in ground.

WE FOUND AN IN-GROUND TANK, NOW WHAT?

RULE ONE, under no condition purchase the house, no matter how "good the deal is", till the tank and ground is tested for any environmental contamination. The tank could have been abandoned many years ago with a couple hundred gallons of oil still in the tank. That oil may have leaked out over the years and has contaminated the ground. A serious environmental condition is something you donít need to inherit with the purchase. If an in-ground tank is discovered, notify your attorney immediately about the tank and have him ask the seller to provide the EPA certification that the tank has been properly decommissioned.

WHAT IF THE SELLER SAYS THAT HE BOUGHT THE HOUSE " AS IS ", HE DIDNíT KNOW THERE WAS IN-GROUND TANK AND HEíS NOT PAYING FOR ANY TANK TESTING?

Well, because he bought the house "as is" doesnít make the problem acceptable. Now the buyer has a decision to make, either walk away and look for another house or, pay for the tank and ground test. If I really wanted the house, I personally would pay for the tank and ground test. However, under no circumstances would I purchase a property with an untested oil tank. At this point I must give the reader another tip. If you have to pay for the tank and ground test, make sure you hire a reputable company to do the testing. A word of caution, the job is too important to hire a company based on price alone. Make sure the testing company has all the latest high tech testing equipment.

THE SELLER SAYS HE DID HAVE AN IN-GROUND TANK BUT HAD IT REMOVED OR FILLED WITH SAND.

Your attorney should ask the seller for the township certification that the tank was environmentally properly filled with sand or removed. One cannot just remove a tank or fill it with sand without the proper documentation from the NJDEP. These papers will be filed with the township.

WHAT IF THE SELLER SAYS THE TANK WAS REMOVED YEARS AGO BEFORE THE NJDEP DOCUMENTATION WAS REQUIRED?

(A) Ask where the tank was located, if you can find the old location, I suggest taking a ground contamination test in the area. Some would say at this point, "arenít you going a little too far with this testing thing?". With the tank gone you are probably safe to say that no further action is necessary but, If you ever had any dealings with MURPHYíS LAW , you wonít hesitate to test the ground for contamination. (MURPHYíS LAW BEING - IF IT CAN HAPPEN IT WILL HAPPEN) By testing the ground you will know for sure if there is a contamination problem.

A TRUE STORY

I was inspecting a small house that seemed like a nice clean little house. When I got to the basement area, I detected a faint odor of oil, the type of oil used as fuel. The basement also had a small crawl space area with a dirt floor where a fuel storage tank was located. I crawled into the space to examine the tank and found a very slow leak. The leak was so small that one could not even see a drop forming on the tank. There wasnít any big oil spot under the tank, just a little spot about 4 inches in diameter. Knowing the danger of oil contamination, I strongly urged the buyer not to purchase the house till the ground under the oil tank, in a tight crawl space, was tested for contamination. About a month later I received a call from the same buyer requesting another home inspection on a different house. When I asked her why she was not buying the first house, she said forget it, the house canít be sold. She said that the owner had the ground tested for contamination and the ground had serious oil contamination. She went on to tell me that the little leak has caused $65,000.00 worth of contamination and the EPA was now involved in the clean up and the house cannot be sold.

THE SELLER SAYS HE HAS INSURANCE ON THE TANK THAT CAN BE TRANSFERRED TO THE NEW BUYER.

MAKE SURE the insurance policy covers ground contamination. Many insurance policies only cover the tank for a leak. Have your attorney go over the insurance policy thoroughly and I would also suggest that you call the insurance company and have them verify that ground contamination is covered. I have yet to know of an insurance company that is in business to pay claims.

TO SUM UP WHEN YOU ARE BUYING A HOUSE WITH AN IN-GROUND OIL TANK BE CAUTIOUS.

(A) If there is a functioning in-ground tank, test the tank for leaks and the ground for contamination.

(B) If there is an abandoned in-ground tank, test the ground for contamination.


Gerald Warren owns and operates G. Warren Inc. in Metuchen New Jersey. He is a member of the American Society of Home inspectors (ASHI). Gerald performs home inspections in most of New Jersey. Visit his company website at www.gwarreninc.com, send him an E-mail, or call his office at (908) 757-3400 for more information.

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