IN-GROUND OIL TANK ADVICE

[Christopher Veljkovic]

Thanks in advanced to those who can help guide me through or shed some light on the following scenario. What would you do?

My wife and I are looking into buying our first duplex. Its in a desirable area which can bring in good cash flow after we move out to our next home. The roof needs work but for the most part the home is move in ready. The asking price is $390K.

The situation:

In-ground oil tank within a basement crawl space, which has been given a clean bill of no leakage by a third party and is in a Category A flood zone. The home owner is unwilling to remove the oil tank. I probably can negotiate for a lesser price of the home, BUT, is the risk worth the reward?! How can I lessen the risks? What can I do besides the obvious getting ground tested? What if the seller will not allow me to test the soil?

Additional note: The seller's realtor claimed that the tank was no longer in use ,but upon further inspection from our realtor the information was deemed misleading.

Thanks again for the input!

[Roy N.]

While it's not a Zone 'V' location, did you factor-in the potential costs of buying a property which lays below the base flood elevation?

But back on-topic, if the oil tank is no longer in use, does it still contain oil?   What are the local and state regulations and legislation - i.e. does the tank meet current requirements (i.e. double skinned, protected from soil contact, etc, or does it need to be remove and/or replaced?

Ultimately if the tank is no longer in service, it should be removed to mitigate the risk of future problems (contamination or simple an inability to sell the property).  Is the issue that the owner does not want to bear the {potential} costs of removing the tank or they are simply unable to deal with the logistics?

In situation such as this, we would normally make the removal of the tank a condition of Close and try to compel the Vendor to have it removed.   Failing that - and if the lender has not made the removal a condition of financing -  we would either walk away or, if the deal is attractive enough, would offer to handle all the logistics of having the tank removed at the Vendors expense.   This would start with securing estimates for both removal of the and any possible remediation of the soil in which is was buried.   We would then share this information with the Vendor and proceed to Close with sufficient funds to address the highest estimate retained in escrow.   The work would then be performed and paid from escrow.  Once complete, inspected and certified as clean, any funds remaining in escrow would be released to the Vendor.