Posted by: Robin Gronsky | November 16, 2011

What Do Home Buyers Need to Know About Underground Oil Storage Tanks?

Many years ago, many home owners used oil to heat their homes.  The oil that was used was purchased in large amounts and stored in a tank that was frequently buried under the home owners’ driveway or somewhere in their yard.  It was meant to be out of sight.  For various reasons, home owners have switched their heating to natural gas and disconnected their oil tank from their furnaces and left the oil tanks in the ground.

It was found that after many years, the oil tanks corroded and the oil leaked out. The oil contaminated the soil and more importantly nearby waterways.  This caused an expensive clean-up effort.  At that time, homeowners’ insurance covered most of the costs of the cleanups.

About 15 years ago, real estate buyers started demanding that, when a home that they wanted to buy had an underground oil storage tank, the homeowners needed to have the tanks emptied out and filled with sand.  The tanks were then left in the ground.  This became the preferred method of dealing with underground oil tanks.

Then, it was found that even though most of the oil had been pumped out, about an inch of oil remained in the tank.  And sometimes the tanks leaked out that inch of water and contaminated the soil and waterways.  This time, there was rarely insurance to pay for the cleanups as insurance companies started excepting oil tank cleanups from their homeowners’ coverages.  Homeowners started to have to pay for the cleanups out of their own pockets.

Because home buyers do not want to have to pay for possible cleanups out of their own pockets, they have been insisting that sellers remove the underground oil tanks from their properties and have the tanks tested for corrosion.  If corrosion is found, they insist that the surrounding soil and water be tested too.

If you are buying a home, you want the home inspections to include an inspection for an underground oil storage tank.  If an oil tank is found, you want to require the seller to remove the tank at the seller’s expense and to test the tank for corrosion.  All real estate agents have heard stories of oil tank cleanups costing $20, 000, $30,000 or more.  Can you afford to pay for that out of your pocket?  Make sure that the seller pays for this repair item.

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