Would love to hear your experiences dealing with oil tanks

Question

Hi BP fam hope all is well!

I wanted to know if anyone has had any experience with buying a home that needed to have an oil tank removed due to leakage into the ground. Seller does not have the funds to do it themselves and is offering to come down on the list price. If you have any experience in the matter of oil tank removal I would love to hear your story. How much did it cost? How long did it take? Was it worth it?

ANY info would be appreciated. Thanks!

Jonathan Greene · Answer

If you are regular home buyer or a new investor, you can't buy a house with an existing tank with a leak under any circumstances. You won't get insured and the risk is too great. The tank pull is right about $1,800-$2,000. When there is a leak, the minimum spend to get the DEP approval is $7,500 for soil testing. If the leak hits a water source or neighboring property, the cleanup could be $100,000. The liability is too big.

My PM just bought a house with an active tank and did ground testing before (not 100% accurate) and made out ok, but we know what we are doing. We budget $10k for a what if, but we also know we could get unlucky. You can get testing done, but if there is a known leak, RUN AWAY.

Thanks for the tag @Joanne Eriaku

Charlie MacPherson · Answer

@Devyn Caraballo  This is a potential landmine and a BIG one at that.  It could (unlikely) be no big deal.

More likely, it could be a HUGE remediation bill that the seller is trying to drop on your shoulders.

Get an EPA Phase 1 inspection at the very least.  Phase II if necessary.

If any of it looks less than perfect, make the seller pay for further inspections as it can get very ugly, very fast.

Personally, I'd be inclined to walk away.

Colleen F. · Answer

NJ is pretty serious about this. I had an aunt with an issue and it was many truckloads of fill later that it was resolved. No idea what is cost.   We had one spring a leak in the middle of winter (just a pinhole) gallons came out but the tenant got buckets under it and it was $2500 for replacement with a roth double wall tank and removal of old tank. I would evaluate above or below ground tank and if it was a spill or long term leak.  The 10 k  might not cover it if leak was extensive and you have to remove and replace a lot of soil. My recollection is my aunt had to have all contaminated soil removed and replaced, then I think it was DEP came in and tested the soil.

Amy H. · Answer

@Devyn Caraballo I’ve had one removed before. Got a DEQ report from the seller that it wasn’t contaminated. So I paid $1k to fill in the below ground one and they removed the above ground one. This is in Virginia.

Lawrence P. Schnapf · Answer

I'm an environmental lawyer and seen lots of these. the costs vary depending if the tank leaked and contaminated soil or groundwater. a small tank with just some surficial or shallow soil contamination from overfills can costs $10K-$20K. if there is extensive soil contamination, the costs can be double, if groundwater is impacted, you could face much higher costs. i would not accept an offer until you have opportunity to take samples to see how extensive contamination.

Devyn Caraballo · Answer

Thank you for all feedback! My instinct is telling me to walk away, especially being a new investor.

Dennis Cosgrave · Answer

It all depends on the level of leakage. I would strongly recommend doing a Phase 2 environmental assessment. The results of that assessment will tell you what the level of contamination is. If it is extensive, the cost to clean it up can be significant.

Steve Morris · Answer

Well, Phase 1 = $1000+/- and only looks up records.  Phase 2 = $5000+/- and does actual samples.

Think I'd be very serious about the property since that's coming out of the buyer's pocket.

Greg Powers · Answer

@Devyn Caraballo

I’m in New Hampshire and our Dept. of Environmental Services has a fund homeowners can tap into to help pay for the clean up of leaking oil tanks.  Part of our gasoline tax funds it.

You definitely want to leave the problem in the seller’s hands.  Don’t take a concession—make them fully remove and remediate.  But if your state has a similar program, it might soften the blow for the seller.

Joanne Eriaku · Answer

@Devyn Caraballo, @Jonathan Greene has a lot of experience with this, and yes, he is in the NY area.

Would love to hear your experiences dealing with oil tanks

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