Investor · NJ · Member since 2018 · 33 posts · 17 votes
Oil tank in old house is common here in New Jersey. I tried to avoid buy a house with oil tank before. Right now, a old house with working underground oil tank accept my lowball offer. I am debating with myself about this deal. I have 3 days attorney review time to make final decision. The house is for sale “as is”. But my offer dies has inspection contingency. I should able to pull out of the deal if I find oil tank leak.
Does anyone in BP have experience of dealing with working oil tank? Which oil tank leaking testing company do you recommend? Is that test reliable? If I purchase this house, should I keep using the oil heating system? If I convert it to gas, should I keep the tank underground or take it out? Any suggestions will be greatly appreciate.
@Hui Song In The first week of November 2020 I had two 500 gallon underground in use oil tanks removed. There was no contamination. The company took about ten soil samples from both sites. It took about 7 hours to remove both tanks and was $7,000. I suspect the cost for one tank would have been about $5,000 because there was a lengthy drive and they still would have needed all the equipment, the cost for the second one was really just another 3 hours of labor and some fuel.
I believe they were testing the soil samples as they went along and it only took about an hour.
If you do buy the property I would recommend removing the underground tank sooner rather than later in case laws are passed with more regulations making it more difficult to remove them where you do not find yourself grandfathered. Just my opinion.
Hi. I think at a minimum you want to get someone out there to test the soil around the tank to ensure it's not leaking. You also want to check the state's database to make sure they don't have the site on their radar for past environmental issues that have not been resolved. This should all be covered in your attorney review letter to the sellers attorney.
also check to see if they have some type of insurance on the tank that can be transferred to you upon purchase.
Call Raul Huarachi to come out and test the soil for you. +1 973-462-7581. You should want to have at least three or four sides of the tank tested. Check with Raul to see if that's something he covers. I believe it is. There's a few companies out here that you really want to stay away from to be honest with you. Raul will actually tell you which ones as no one's going to mention them online.
Oil tank is fine if it is not leaking. there are plenty of environmental consultants who can test tank. they can take soil samples around the tank to see if there are any signs of leakage. Partner Environmental Science and Engineering is reasonably priced. If the tank is leaking but the groundwater is deep, could still go forward but ask for discount to address the tank.
If the tank is less than 2,000 gallons, it is considered unregulated. Here is the NJDEP website for unregulated home heating oil tanks:https://www.nj.gov/dep/srp/unr...
@Hui Song In The first week of November 2020 I had two 500 gallon underground in use oil tanks removed. There was no contamination. The company took about ten soil samples from both sites. It took about 7 hours to remove both tanks and was $7,000. I suspect the cost for one tank would have been about $5,000 because there was a lengthy drive and they still would have needed all the equipment, the cost for the second one was really just another 3 hours of labor and some fuel.
I believe they were testing the soil samples as they went along and it only took about an hour.
If you do buy the property I would recommend removing the underground tank sooner rather than later in case laws are passed with more regulations making it more difficult to remove them where you do not find yourself grandfathered. Just my opinion.
The seller does not have insurance for oil tank. Right now, the seller back out from the offer. It’s was listed as $483K in 2019. on and back to market a few times with different realtors. It has unpaid balance $430K to bank. The seller is 85 years / 75 years old couple. They refused our $430K offer before. The most recent listing price is $600K. Their res get our offer two days ago in attorney review.
Thanks for your recommendation and the link of “site remediation program”. It definitely help me make further decisions regarding house with oil tank even I don’t need do the test this time since the deal fall out.
i dont think the regulations will get tougher for home heating oil tanks because of concern for costs. That is why NJDEP created the streamlined process for unregulated tanks. Market conditions will likely be drive the decisions. Burning oil for heat is probably going to be viewed as antiquated the further along we go in this century.
From an insurance perspective, an inground oil tank is an issue for the majority of our Insurance companies. There are some that will write it but some of them will exclude coverage for it. I would check with your agent to see if they can write it.
One of the issues with purchasing a property with an in-ground tank is that you then own any pollution on your new property, even if it happened over time. I'm told by realtors that it can cause a problem when selling the house also.
Many lenders won't even lend on a purchase with an underground oil tank. One actually had my client have a permitted decommissioned tank removed before allowing closing. Its the really the insurance/liability issue since the current Title holder is liable for the clean up, if any.
If it was me, iIf there is a next time, I would definitely remove the tank. I'm not sure what market you are in. I hear some areas of NJ routinely transfer properties with UST's, but normally it my area its a red flag.
I disagree that an oil tank is a deal killer. I've been an environmental lawyer for over 35 years in New York and New Jersey. lenders have varying risk tolerances. statements that lenders wont lend on homes with tanks is just overbroad and just plain wrong. Tanks may raise questions but they can be answered or addressed.
Thanks for all your input. Oil tank is definitely a big issue and need be addressed when structure a deal. My previous offer was pulled out by seller. Right now, I am placing offer for another property with underground oil tank too. The seller sale property “as is” and will not do anything to the property. Any offer have to take over his “existing tenant” and have to handle the oil tank. I price the oil tank issue as -$50K into my lowball offer with environment inspection contingency. At the same time, I am contacting my lender and insure agent to discuss this issue.
@Hui Song Reach out to Teddy Slacks at Simple Tank Solutions. They do a guaranteed estimate on the remediation cost if there is a leak. Also, when doing the soil test, they have another guarantee you can pay for which basically says, if we say there's no leak and there is, they will do it for no cost. He's my go to for this type of stuff.