I wrote an article on Underground oil tanks for Basking Ridge Patch about 18 months ago. An excerpt follows:
While there is no law against the transfer of property with an underground oil tank, it is increasingly difficult to do so — especially in a buyers’ market!
Even properly decommissioned tanks run the risk of having leaked at some point in time. The cleanup of contaminated soil is the responsibility of the homeowner — regardless of when the leak occurred.
In other words, if you buy a house with an underground tank and a year later you pull the tank to convert to natural gas and there is a leak, then YOU are responsible for the cleanup. There will be no going back to the prior owner for help with the cleanup and there will be nobody to blame!
I received a comment/question on the article today:
My fiancé and I put an offer on a home with an Underground Oil Tank. The property is a short sale and the bank will not do a thing… Any suggestions?
I thought I would share my response:
My honest opinion – don’t buy the property. There is no way to tell – without pulling the tank – if there is any deterioration. Once you own the property, you own the problem. The only way I would consider it is if the tank is insured with a transferable policy that covers 3rd parties, ground water AND soil remediation. The chances of a policy such as that being active and up to date on a short sale are slim. Even if you are getting a really good deal – which you probably are on a short sale – the cost of a remediation project can be in the tens of thousands of dollars or more. I would push the bank – though I just got short sale approval on a deal that’s been in progress of over a year – I doubt you will get very far. I had a bank pull a tank once, but that was a foreclosed property not a short sale. In a short sale the bank doesn’t own the property… Maybe the seller will pull it – but if they are in a short sale situation they probably don’t have the money to pull the tank. A tank pull is about $1500 with additional costs if you need to put in a new tank or convert to gas.
Let me know if you have any other questions. If you are working with a Realtor, he or she should be able to help too!
Good luck!
