Underground Oil Tank

The house we're going into contract on has an underground oil tank. I feel like an idiot because we never asked before we put in the bid (actually, I feel like my RE Agent is an idiot for not asking about it - or the age of the boiler - but don't get me started...). Anyway, she's asking that it be part of our contract that the current owners legally abandon the oil tank before we close. I've been reading lots of scary stuff on the internet this weekend about underground oil tanks - how it's hard to get homeowner's insurance if you have one; how if there's a leak it could cost you hundreds of thousands of dollars for the cleanup. Abandonment apparently costs $600 and a new oil tank about $2000 on top of that.

We have to insist that they abandon the oil tank, right? Because if there IS a problem with it, this way it's on their hands and not on mine. But is this a dealbreaker? If they won't do it, do we walk? It seems crazy to walk over a $600 issue, but if "The Internet" is right and it could cost six figures for a cleanup... What do you think?

Re: Underground Oil Tank

depends on what kind of tank it is? is it fiberglass, or the old one?

i'd ask them to do it. make it part of the contract. the worst they can say is "no" and you have to figure out if you still want to move forwrad or not.

the house we are buying still has an underground tank. but the old one was abandoned and they have a fiberglass. they "say" those last forever...

Re: Underground Oil Tank

The house I am buying still has the underground tank. Or, at least I thought it did...the appraiser somehow put it in his report that it was in the basement. I don't know!

Anyway, we didn't make them do anything to it because we wanted the house and wanted it to go as fast and smooth as possible. We realize that eventually we may need to take care of it. I also called around already for homeowners insurance and didn't have any issue finding companies to insure us.

Re: Underground Oil Tank

I don't know how old the tank is or what it's made of. Considering that the boiler is 58 years old, I have to assume the worst.

Thanks for the info on the insurance - I read several stories from people in New Jersey that couldn't get insurance because of an underground tank but didn't know if it's the same in LI.

Re: Underground Oil Tank

We also have an underground tank. We actually took money off the offer because of it. After our inspection, we got an estimate about how much it would cost.

Currently, there is no law that says exactly what you need to do with an underground tank. However, you can abandon it now before it becomes a law. That is what we will be doing.

Re: Underground Oil Tank

The house we are buying has and underground oil tank but its fiberglass. The oil burner is old so dont automatically assume the oil tank is too. Our inspector said that fiberglass ones are not a problem. All you need to do is ask.

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I don't know if the tank is fiberglass or not. I just emailed my agent and asked her to find out.

Thanks for making me feel a little better about this; I think now that we're actually going to contract and it's real money and a real house we're dealing with, everything seems really scary and huge.

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Re: Underground Oil Tank

We bought 8 years ago and the house had an underground tank. It was hard back then to get ins so I can only imagine now. My boss is selling a house with an underground tank right now and the buyers are insisting he abandons and pays for a new aboveground tank. We wound up abandoning it ourselves last year--cost depends on the size of the tank and converted to gas--if there's gas in the area you might want to consider that. Good Luck. If you love the house I wouldn't walk away. Try to compromise if they give you a hard time

Re: Underground Oil Tank

we actually had a test done on the underground tank when we had our inspection done.

If I was you, I would invest in the tank test before you go any further. if the tank is leaking....it could cost big bucks to clean up.

good luck

Re: Underground Oil Tank

you have a two options. have them abandon it or they give you 2K that is the clause most re's let sellers know ahead of time when they sign the re agreement.

if you tell them you are going to have the ground tested I bet they do it, but they may not b/c it is just about 5k to do.
their is a town of hempstead website that tells you what is required and price. its 5k I remember it saying.

Re: Underground Oil Tank

See if you can negotiate them abandoning it or a credit at closing. We negotiated a credit at closing for a $1000 more than the cost of doing it.

Re: Underground Oil Tank

we had the same situation! it DEFINITELY needs to be done while the owners legally own the home, just to be safe. however they are not required to do so.. its a negotiation tactic on yur part. we got them to do it but we split the cost. it was 700 each and we opted to get the better tank.

Re: Underground Oil Tank

Talk to your attorney and ask his/ her recommendations.

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I talked to my lawyer today and he says we should insist that not only do they abandon the tank, but they pay for testing the soil. So he's putting that into the contract and we'll see what they say. He said that any buyer who makes an offer on that house would insist on abandonment at the least, so they shouldn't have a problem on going that far. We'll see...

Re: Underground Oil Tank

hey dava. just wanted to tell u we had the same issue with our house. we insisted they abandon the tank and convert to gas heat. we had to walk away when they balked, but in a month they reconsidered and we got the house. i hope it all works out for you!!!

Re: Underground Oil Tank

Definitely don't ignore this before buying the house. My best advise (I am an environmental consultant) is to test the tank. you could get it tested for around $650. Or, if it is not in use, have them remove it. Depending on the tank location, it may not cost much more to remove it than to abandon it. BTW, fiberglass tanks leak also. They can crack! Have the attorneys fight it out that they handle it and remind them that whoever they sell the house to will have the same issue - it will not go away!

Re: Underground Oil Tank

We have an underground tank at our house. You can go to the town and find out all the info. on it.

The old owners abandoned the old tank and installed a new fiberglass tank (which is still underground) but from what I understand fiberglass tanks are basically indestructable. I never had anything tested.

Re: Underground Oil Tank

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Message edited 11/21/2009 4:36:02 PM.