Leaking oil tanks present a substantial environmental hazard. As such, sellers, buyers, lenders, and real estate representatives need to know if a buried oil tank(s) is on a premises being sold.
Below ground oil tank could describe an oil tank located in a basement which is open to view. More commonly, an underground storage tank (UST) is buried beneath the ground and outside of the structure. This post concerns itself with this type of situation.
The main concern related to a UST is leakage and or contamination. If an UST is still in use, it’s best to have an environmental firm “pressure test” the tank.
Compressed air is pumped into the tank and capped. A pressure gauge is fitted on the oil filler spout, locked down to prevent air leakage, and remains in place for a specified time period. If the pressure remains constant, no leakage is apparent, and the tank is normally considered safe for continued use.
If the UST fails the pressure test, it’s a good idea to find out why. Most often, tank failure is the culprit. If leakage is found, surrounding soil will most likely be contaminated. Liability remains with the property owner. Speak to your legal advisor about your options as a potential new owner or as the seller.
Lenders may require a working, non-leaking UST be removed before approving a loan. Underwriting standards vary and it’s a good idea to let your loan officer and or processor know an underground storage tank is located on the property.
Abandoned tanks of any type should be examined. Many lenders will require complete removal. If evidence of leakage and or contamination is found, environmental remediation will be required. The NYS Department of Environmental Conservation is a good place to research policies and procedures related to a spill. Leakage is supposed to be reported as soon as it is found.
Generally, a home inspection will turn up a residential UST. Commonly, the fuel supply line will run through a basement wall, footer, or foundation and be connected to the oil burner if still in use. A cut fuel supply line usually indicates an out of service buried tank.
The New York State Property Disclosure Statement asks sellers on page 3, question #14: “Are there or have there ever been storage tanks above or below the property?” If the answer is yes, the disclosure statements asks for the location(s) and if they have ever leaked with an explanation if leakage has occurred.
Due diligence is the cautionary note here. Consult with your attorney, home inspector, and real estate representative to gain a clear understanding of this issue. Please bring your questions to a professionally trained and licensed home inspector and contact your attorney for more information on this topic.