Buried Oil Tanks - What Buyers Need to Know
As a home buyer, performing "due diligence" is a must these days. While its beneficial to rely on your real estate agent and home inspector for information, it still pays to do your homework. This is especially true of the issue of underground residential fuel oil storage tanks (USTs).
In South Jersey, and especially in the coastal communities, the hot-button issue now is USTs. Many, many deals are delayed or canceled because of fuel oil environmental issues, real or imagined. So, what can you do to minimize your chance of purchasing a home with a potential environmental (and financial) liability? Here is my perspective as a home inspector who is encountering USTs routinely during my inspections in coastal New Jersey.
1. Is there a tank in the ground?
Fuel oil tanks can be above ground, in basements, or underground. In coastal communities, as there are few basements and space is at a premium, most tanks are buried. Just because a home is heated with natural gas, does not mean there is no oil tank in the ground. Prior to the mid 1960's, if no gas was in the neighborhood, oil was the fuel of choice at the shore. When gas became available, people converted in most cases, leaving the oil tank buried in the ground. Does the seller know? You can't simply rely on the "I am no aware of ... " disclosure statement in your agreement of sale. They may not remember, may not want to reveal it and hope you never find out, or they may be relying on a past owner's declaration or a firm they paid to look when they bought the home. The "ostrich" philosophy of burying your head in the sand does not work out favorably here at the shore - most likely, you will hit oil!. You need to know since any environmental problem becomes yours once you settle on the home.
2. How can a UST be found?
First, call the local municipality's tax assessors office. Armed with the lot and block number, ask what the original source of heat was when the home was built. If is was fuel oil, then you have some more work to do. Next, when you walk through the home, check out the basement (if there is one that is!). Oil-fired boilers or furnaces are typically set on the lowest floor, and a fuel oil tank would be nearby. An above ground tank is of course easy to spot. But wait! the "old" tank may still be in the ground! Don't assume an above ground tank is the original.
If no oil tank is found, then keep looking. If its still on the premises, it could be buried below a driveway or porch, or in the yard under patio pavers or buried below the garden. I look for these clues: a metal fill or vent pipe showing up beside the home or in the driveway, a unexplainable 2-3" hole in the concrete driveway (former fill pipe that was removed), or small diameter copper tubes coming through the basement or crawlspace foundation wall or floor. If you cannot find any of these clues, you probably have done your due diligence. To be more certain (but still not 100%), a tank inspection company can be called to do a more thorough search using a magnetometer or ground penetrating radar.
3. OK. There is a tank. Is this a problem?
Not necessarily. The tank may have been abandoned (cut open, cleaned and refilled with sand under a municipal permit). However, there are instances where a tank was abandoned after it leaked, and an environmental issue has resulted.
4. The seller has paperwork stating that no tank was found. We're ok, right?
Not necessarily. Many tank abandonments were done in the coastal South Jersey area by a company that is no longer in business. A number of these abandoned tanks have since been found to have leaked but this was not discovered at the time. So, an "all clear" acknowledgement from a company is not necessarily enough - be sure the company is still in business so that if they missed something, you have recourse.
5. We've struck oil! Now what?
While a gusher might be reason to celebrate in Texas, here at the shore, it can spell doom and gloom for a real estate deal. I am familiar with recent fuel oil spill remediation jobs that cost in excess of $300,000. Selling a home with an acknowledged oil leak, even if it is possible, is not in anyone's best interest. An environmental company will need to be retained, and money and time will need to be spent by the owner.
6. What happens next if an oil leak is discovered??
Lets hope that you are asking this question before closing on the property. A tank remediation company will need to be retained to excavate, clean up the contaminated soil, and restore the ground. Sometimes this means the home will need to be underpinned to excavate below the foundation, which adds to the cost and time. The NJ Dept. of Environmental Protection will be notified, and a permit will need to be obtained so that the city and county can inspect the job. When its done, you can rest easy. Providing an experienced, qualified company did the work, everything should be fine.
There are some excellent resources available on USTs. Click here for the publications found on the NJ DEP site. A good reference is the NJ DEP Homeowners Reference Guide to cleaning up heating oil discharges. Also, visit the Field Guide to USTs found on the National Association of Realtors website.
If you are in South Jersey, you may want to call someone who knows what is up with oil storage tanks. I have spoken at length with John Callaghan, an engineer with CALMAR Associates. CALMAR handles site assessments, remediation and other services. Their phone number is (609) 476-4500. If you need advice or investigation services, he is one who can help. Note - I have no financial "relationship" with any service professional or real estate professional I may mention in my blog. I always encourage clients to shop around. As a buyer, be sure that the real estate professional you select is 100% independent and unbiased in who they recommend. Unfortunately, real estate agents can be tempted by favors they are offered from mortgage brokers, termite inspectors, insurance agents, title companies, and yes, home inspectors, to be referred business.
In South Jersey, and especially in the coastal communities, the hot-button issue now is USTs. Many, many deals are delayed or canceled because of fuel oil environmental issues, real or imagined. So, what can you do to minimize your chance of purchasing a home with a potential environmental (and financial) liability? Here is my perspective as a home inspector who is encountering USTs routinely during my inspections in coastal New Jersey.
1. Is there a tank in the ground?
Fuel oil tanks can be above ground, in basements, or underground. In coastal communities, as there are few basements and space is at a premium, most tanks are buried. Just because a home is heated with natural gas, does not mean there is no oil tank in the ground. Prior to the mid 1960's, if no gas was in the neighborhood, oil was the fuel of choice at the shore. When gas became available, people converted in most cases, leaving the oil tank buried in the ground. Does the seller know? You can't simply rely on the "I am no aware of ... " disclosure statement in your agreement of sale. They may not remember, may not want to reveal it and hope you never find out, or they may be relying on a past owner's declaration or a firm they paid to look when they bought the home. The "ostrich" philosophy of burying your head in the sand does not work out favorably here at the shore - most likely, you will hit oil!. You need to know since any environmental problem becomes yours once you settle on the home.
2. How can a UST be found?
First, call the local municipality's tax assessors office. Armed with the lot and block number, ask what the original source of heat was when the home was built. If is was fuel oil, then you have some more work to do. Next, when you walk through the home, check out the basement (if there is one that is!). Oil-fired boilers or furnaces are typically set on the lowest floor, and a fuel oil tank would be nearby. An above ground tank is of course easy to spot. But wait! the "old" tank may still be in the ground! Don't assume an above ground tank is the original.
If no oil tank is found, then keep looking. If its still on the premises, it could be buried below a driveway or porch, or in the yard under patio pavers or buried below the garden. I look for these clues: a metal fill or vent pipe showing up beside the home or in the driveway, a unexplainable 2-3" hole in the concrete driveway (former fill pipe that was removed), or small diameter copper tubes coming through the basement or crawlspace foundation wall or floor. If you cannot find any of these clues, you probably have done your due diligence. To be more certain (but still not 100%), a tank inspection company can be called to do a more thorough search using a magnetometer or ground penetrating radar.
3. OK. There is a tank. Is this a problem?
Not necessarily. The tank may have been abandoned (cut open, cleaned and refilled with sand under a municipal permit). However, there are instances where a tank was abandoned after it leaked, and an environmental issue has resulted.
4. The seller has paperwork stating that no tank was found. We're ok, right?
Not necessarily. Many tank abandonments were done in the coastal South Jersey area by a company that is no longer in business. A number of these abandoned tanks have since been found to have leaked but this was not discovered at the time. So, an "all clear" acknowledgement from a company is not necessarily enough - be sure the company is still in business so that if they missed something, you have recourse.
5. We've struck oil! Now what?
While a gusher might be reason to celebrate in Texas, here at the shore, it can spell doom and gloom for a real estate deal. I am familiar with recent fuel oil spill remediation jobs that cost in excess of $300,000. Selling a home with an acknowledged oil leak, even if it is possible, is not in anyone's best interest. An environmental company will need to be retained, and money and time will need to be spent by the owner.
6. What happens next if an oil leak is discovered??
Lets hope that you are asking this question before closing on the property. A tank remediation company will need to be retained to excavate, clean up the contaminated soil, and restore the ground. Sometimes this means the home will need to be underpinned to excavate below the foundation, which adds to the cost and time. The NJ Dept. of Environmental Protection will be notified, and a permit will need to be obtained so that the city and county can inspect the job. When its done, you can rest easy. Providing an experienced, qualified company did the work, everything should be fine.
There are some excellent resources available on USTs. Click here for the publications found on the NJ DEP site. A good reference is the NJ DEP Homeowners Reference Guide to cleaning up heating oil discharges. Also, visit the Field Guide to USTs found on the National Association of Realtors website.
If you are in South Jersey, you may want to call someone who knows what is up with oil storage tanks. I have spoken at length with John Callaghan, an engineer with CALMAR Associates. CALMAR handles site assessments, remediation and other services. Their phone number is (609) 476-4500. If you need advice or investigation services, he is one who can help. Note - I have no financial "relationship" with any service professional or real estate professional I may mention in my blog. I always encourage clients to shop around. As a buyer, be sure that the real estate professional you select is 100% independent and unbiased in who they recommend. Unfortunately, real estate agents can be tempted by favors they are offered from mortgage brokers, termite inspectors, insurance agents, title companies, and yes, home inspectors, to be referred business.
posted by Zack | 3:38 PM
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