Rental Property Investor · Sacramento, CA · Member since 2012 · 26 posts · 9 votes
Hello fellow BPers. Question for those who are familiar with rural properties that have propane service;
Who owns the propane tank when you purchase a REO property in California?
We bought the property about five years ago, now the supplier claims that they own the tank, and we therefore owe them tank rent. It is my assumption that, if the tank was still there when we purchased the property from the bank, it is now owned by us/goes with the property.
Anyone experienced on how this law works? Seems like they are trying to pull one over on us. They are currently demanding that we somehow prove that we own it....several years later.
Thanks in advance for sharing your experience/knowledge!
@Brandon G. Welcome! Usually the company will come get the tank when someone hasn't used it in a while. It all depends on whether the previous owner owned the tank or leased the tank. I lease the tanks as it doesn't make sense to buy the tank in my opinion. Currently I pay $55 for a year of rental. Has the propane company in question been filling the tank for you on a regular basis? Does the tank have their logo on it? I find it very odd that a propane company would not have been on top of this from day one if they owned the tank. Most propane companies would have come taken the tank back if it were leased and not owned by the homeowner. Also, you sign an agreement for the tank lease. No agreement means you dont owe them a penny. Good luck and keep us posted.
@Dylan Vargas Yes, none of this adds up with the company. That is why I'm questioning how the actual real estate law works on this. They claim that they had a contract with the old homeowner from 2008.
The homeowner was foreclosed upon, house became REO, we bought from the bank in approx 2014. Seems to me like they should have reclaimed the tank if she wasn't fulfilling the terms of her agreement (and probably had years to do it in the foreclosure process) if it was truly their property.
My assumption, that I am looking to confirm, is that once the property became REO, they would loose their claim if the tank actually was owned by the company. Or, at very least, they have a limited time to state and rectify such a claim. 4-5 years after we took ownership does not seem reasonable or legal to me.
Funny you mention the logo. Yes they put a fresh sticker on it a few years ago and I was wondering why. Now I am LOL in hindsight. I think I will try and find a nice sports car and put my sticker on it and tell the owner "see, its mine".
@Brandon G. Have they been servicing your home since you have owned the home? Usually the lease fee is applied and paid every year on a leased tank. I would think they have lost rights to the tank and would need to present a contract with the tank number on it for any consideration of a claim. They should have reclaimed the tank from previous homeowner unless it was for a short amount of time (few months?) in my opinion. If you have NOT been paying a lease fee then I feel they have no clim. Propane companies never let this fee slide and its paid yearly.