Oil tank leaks and potential environmental hazards

Oil tank leaks and potential environmental hazards

Investor · Chambersburg, PA · Member since 2018 · 8 posts · 4 votes

I am looking at a duplex in Chambersburg, PA that has several major issues. The home inspector noticed the sump in the basement (which is just a chiseled out hole) had still water with an orange tint to it. The current owner’s have the pump unplugged, which seemed strange because there is a problem rain water flowing into the basement. He investigated further and found that the oil tank, while unused, was damp on the bottom and the old oil was leaking out. From there, it seemed that the rain water would carry it to the sump, and the pump, if operational, would empty it into the yard. I am very hesitant to pursue this deal any further, as it will be our first investment property. Digging through the forums, I have found similar issues where underground oil tanks were leaking directly into the ground. There seemed to be a general consensus that the EPA would get involved and this would escalate into a nightmare.

Anyone have any thoughts on the matter?

Thanks!


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Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
7y

@David Beltz I would run, not walk away. Oil tanks can easily cost 6-8k to remove if they are buried, and then you have the environmental cleanup... 

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  • Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    7y

    @David Beltz I would run, not walk away. Oil tanks can easily cost 6-8k to remove if they are buried, and then you have the environmental cleanup... 

  • Investor · Chambersburg, PA · Member since 2018 · 8 posts · 4 votes
    7y

    @John Warren this one is in the basement of the house. We were getting the feeling to run, but we are definitely concerned about the issue. How do you recommend we go about that? I almost feel as if they are selling to avoid the problem. I will let them know because I don’t want another investor getting thrown into this without knowing, but I’m not sure they will tell another buyer about the leak.

  • Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    7y

    If there was oil in the basement , the smell would hit you like a ton of bricks , heating oil is diesel fuel , it has a strong odor . Fuel oil is dyed red , not orange . What you see in the sump is probably iron in the ground water leaching up thru the soil .  When I remove a oil tank , I take it and cut it open with a torch and burn off the sludge and then scrap it . 

  • Investor · Chambersburg, PA · Member since 2018 · 8 posts · 4 votes
    7y

    It wasn't a severe leak at the moment, and the current tenants had everything from tires to engines and transmissions stored in the basement. There were a variety of smells coming from this place, so it was hard to pinpoint. Here is a snapshot from the inspection report. The inspector describes it as red, as you can see here. The method you use to dispose of an old oil tank was not used in this house. You can tell from the dark colored floor (it is wet, not just a dark floor) that water gets into this room where the oil tank is located. We then followed the wet spots to the sump, which led to our conclusion.

  • Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    7y

    Find another house to buy.

  • Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    7y

    @David Beltz there are a lot of properties you can buy in the USA. Run!

  • Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    7y

    Pass on this deal 

  • Investor · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    7y

    Definitely pass. If it’s leaking and possibly pumping outside, you’re looking at between $10-50K+. Not worth the hassle unless you can figure it into your offer somehow.

    I have some oil tank remediation stories that will make you never want to buy a house again. ;)

  • Investor · Chambersburg, PA · Member since 2018 · 8 posts · 4 votes
    7y

    We came back at the sellers with the stipulation that they investigate and fix any issues with this if they want us to buy. We are waiting for their response, but I am fairly certain it will be a no. How do we ensure that the next potential buyers will be aware of this?

  • Investor · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    7y

    I’m not sure there is a good method. Maybe the seller’s realtor is honest and when the next realtor calls and ask why it’s been on the market for a while they’ll say so. 

    Is there a seller’s disclosure on the property? 

    Lastly, maybe a call to the DEP... but that’s sort of a sh***y thing to do, and I’m not sure their jurisdiction as most of the contamination is likely interior. 

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