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dianadrw
LIF Adult
Member since 5/06 2092 total posts
Name:
Me
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Buried oil tank
We are looking to buy a house that has a buried oil tank. Is this an issue? This is a For Sale By Owner if it makes a difference. Our offer was just accepted but we haven't had an engineer do an inspection yet.
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Posted 10/4/16 9:53 AM  |
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alli3131
Peanut is here!!!!!!
Member since 5/09 18388 total posts
Name:
Allison
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Buried oil tank
My house has one. It was just a little more difficult to get insurance. Some companies won't write a policy fir a house with one. The old owner had recently replace the tank (10 years or so) so we knew it was ok. We changed to gas 2 years ago and had it filled with sand.
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| Posted 10/4/16 11:56 AM |
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AliceCullen
LIF Adult
Member since 6/08 1497 total posts
Name:
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Re: Buried oil tank
We bought our house with it buried 5 years ago and just recently filled it and had an above ground one installed. A few companies would not offer home insurance with it underground and no one would offer an umbrella policy. My DH was so anxious to get it abandoned because he was worried there would be a problem with leaks since it was very old. I've heard oil leaks can be very costly to the homeowner, supposedly tens of thousands of dollars. A lot of people will negotiate with the seller to split the cost of having it abandoned before the sale goes through.
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| Posted 10/4/16 2:10 PM |
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dianadrw
LIF Adult
Member since 5/06 2092 total posts
Name:
Me
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Re: Buried oil tank
Posted by AliceCullen
We bought our house with it buried 5 years ago and just recently filled it and had an above ground one installed. A few companies would not offer home insurance with it underground and no one would offer an umbrella policy. My DH was so anxious to get it abandoned because he was worried there would be a problem with leaks since it was very old. I've heard oil leaks can be very costly to the homeowner, supposedly tens of thousands of dollars. A lot of people will negotiate with the seller to split the cost of having it abandoned before the sale goes through.
Negotiating with the seller is sort of what we are thinking. DH is a foundation engineer and he's concerned about the environmental impact with it being buried.
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| Posted 10/4/16 3:02 PM |
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jamnmore
LIF Adult
Member since 6/16 989 total posts
Name:
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Buried oil tank
Years ago my mom sold her house and there was an underground tank.The buyers negotiated and she agreed to replace. She actually covered the full cost, but had the work done herself, because she did not want to give them a credit that would not be used for that purpose.
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| Posted 10/4/16 3:16 PM |
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Re: Buried oil tank
As others have said, it can be a potential insurance issue. The concern is leaks/environmental liability. If you have a leak with an oil tank, the EPA has to be called/involved in cleanup. But with underground tanks, you may not catch the leak immediately, it can leach into the soil, and clean up can be very costly (like $100K!).
In reality, that's probably pretty unlikely to happen, but it is an extra risk/concern. It helps to know how old the oil tank is/when it was installed, what it is made out of, what size it is, etc. If it's a relatively new tank and made of less corrosive material and designed to be in the ground, that's more reassuring. I work a lot in Levittown where you sometimes have tanks in the ground that are original, from the 1940s, and that is more concerning.
It's relatively inexpensive (around $2K to $2500) to have a buried tank properly abandoned (filled, capped, etc.) and have a new above-ground tank installed. So many people go this route.
It's very common for buyers to try to negotiate this with the seller (but it should be done as part of the initial offer, imo - harder to negotiate it AFTER the terms of the offer have been already negotiated and agreed-upon). Buyers are often successful with this because it's something that will come up with any buyer... home inspectors will always make an issue of it. As a buyers agent, I always advise my clients of the risk (and then it's up to them). I prefer that the sellers take care of the abandonment/new tank installation before closing, rather than giving my buyers a credit to do it after the fact. I prefer it because the liability is a greater issue than the cost. If the buyers get a credit and go to take care of this post-closing, only to find there was a small leak and now they have an environmental clean up on their hands, they will need a lot more than a $2K credit, and there's really no recourse against the sellers. Once the house is legally the buyers', all of the problems that flow from the house are the buyers'!
I wouldn't necessarily NOT buy a house - or advise a client not to buy a house - just because of a buried tank. Many people have inground tanks and never have a problem. But I would do more due diligence on it and see if the seller is willing to take care of it prior to closing, or perhaps give a credit so it's something the buyers can do immediately upon closing if they want to do it.
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| Posted 10/5/16 9:25 AM |
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dianadrw
LIF Adult
Member since 5/06 2092 total posts
Name:
Me
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Re: Buried oil tank
Posted by Century 21 Dallow - Christine Braun
As others have said, it can be a potential insurance issue. The concern is leaks/environmental liability. If you have a leak with an oil tank, the EPA has to be called/involved in cleanup. But with underground tanks, you may not catch the leak immediately, it can leach into the soil, and clean up can be very costly (like $100K!).
In reality, that's probably pretty unlikely to happen, but it is an extra risk/concern. It helps to know how old the oil tank is/when it was installed, what it is made out of, what size it is, etc. If it's a relatively new tank and made of less corrosive material and designed to be in the ground, that's more reassuring. I work a lot in Levittown where you sometimes have tanks in the ground that are original, from the 1940s, and that is more concerning.
It's relatively inexpensive (around $2K to $2500) to have a buried tank properly abandoned (filled, capped, etc.) and have a new above-ground tank installed. So many people go this route.
It's very common for buyers to try to negotiate this with the seller (but it should be done as part of the initial offer, imo - harder to negotiate it AFTER the terms of the offer have been already negotiated and agreed-upon). Buyers are often successful with this because it's something that will come up with any buyer... home inspectors will always make an issue of it. As a buyers agent, I always advise my clients of the risk (and then it's up to them). I prefer that the sellers take care of the abandonment/new tank installation before closing, rather than giving my buyers a credit to do it after the fact. I prefer it because the liability is a greater issue than the cost. If the buyers get a credit and go to take care of this post-closing, only to find there was a small leak and now they have an environmental clean up on their hands, they will need a lot more than a $2K credit, and there's really no recourse against the sellers. Once the house is legally the buyers', all of the problems that flow from the house are the buyers'!
I wouldn't necessarily NOT buy a house - or advise a client not to buy a house - just because of a buried tank. Many people have inground tanks and never have a problem. But I would do more due diligence on it and see if the seller is willing to take care of it prior to closing, or perhaps give a credit so it's something the buyers can do immediately upon closing if they want to do it.
Thank you so much for this information. It's very helpful. 
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| Posted 10/5/16 12:20 PM |
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luvbuffet
LIF Adult
Member since 7/10 6470 total posts
Name:
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Re: Buried oil tank
what if you just left the tank in the home?
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| Posted 10/5/16 12:23 PM |
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alexb
LIF Adult
Member since 5/13 960 total posts
Name:
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Buried oil tank
We have a buried oil tank and had no issues getting an umbrella policy through AIG...
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| Posted 10/5/16 4:56 PM |
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Mill188
LIF Adult
Member since 3/09 3073 total posts
Name:
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Re: Buried oil tank
Posted by luvbuffet
what if you just left the tank in the home?
Removing an above ground in the home tank is easy. There are no issues with it even if it hasn't been used in forever.
The problem is with oil tanks buried underground as they can leak and ground contamination can occur.
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| Posted 10/6/16 10:28 AM |
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Jenn79
One more?
Member since 2/12 2410 total posts
Name:
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Re: Buried oil tank
We have a double wall fiber glass one in the ground. We were told there is no need to replace it because it's fiber glass. My neighborhood has about 80 homes that were built in the early 80's and we all have it. We had no problem getting homeowners insurance either. Not sure if certain towns have their own rules though. Do you know what kind it is?
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| Posted 10/9/16 12:31 PM |
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pumpkinmom
LIF Adult
Member since 5/12 2911 total posts
Name:
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Re: Buried oil tank
Posted by Century 21 Dallow - Christine Braun
As others have said, it can be a potential insurance issue. The concern is leaks/environmental liability. If you have a leak with an oil tank, the EPA has to be called/involved in cleanup. But with underground tanks, you may not catch the leak immediately, it can leach into the soil, and clean up can be very costly (like $100K!).
In reality, that's probably pretty unlikely to happen, but it is an extra risk/concern. It helps to know how old the oil tank is/when it was installed, what it is made out of, what size it is, etc. If it's a relatively new tank and made of less corrosive material and designed to be in the ground, that's more reassuring. I work a lot in Levittown where you sometimes have tanks in the ground that are original, from the 1940s, and that is more concerning.
It's relatively inexpensive (around $2K to $2500) to have a buried tank properly abandoned (filled, capped, etc.) and have a new above-ground tank installed. So many people go this route.
It's very common for buyers to try to negotiate this with the seller (but it should be done as part of the initial offer, imo - harder to negotiate it AFTER the terms of the offer have been already negotiated and agreed-upon). Buyers are often successful with this because it's something that will come up with any buyer... home inspectors will always make an issue of it. As a buyers agent, I always advise my clients of the risk (and then it's up to them). I prefer that the sellers take care of the abandonment/new tank installation before closing, rather than giving my buyers a credit to do it after the fact. I prefer it because the liability is a greater issue than the cost. If the buyers get a credit and go to take care of this post-closing, only to find there was a small leak and now they have an environmental clean up on their hands, they will need a lot more than a $2K credit, and there's really no recourse against the sellers. Once the house is legally the buyers', all of the problems that flow from the house are the buyers'!
I wouldn't necessarily NOT buy a house - or advise a client not to buy a house - just because of a buried tank. Many people have inground tanks and never have a problem. But I would do more due diligence on it and see if the seller is willing to take care of it prior to closing, or perhaps give a credit so it's something the buyers can do immediately upon closing if they want to do it.
When they abandon the tank, are they checking for leaks, or is it possible you'll have ground contamination and just not know about it?
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| Posted 10/9/16 1:44 PM |
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